published in: Gabriel Fagan, Francesco Mongelli and Julian Morgan (eds.), Institutions and Wage Formation in the New Europe: Proceedings of the ECB's Annual Labor Market Workshop, London: Edward Elgar, 2004
This paper provides new empirical evidence on the relationship between reservation wages
of unemployed workers and macroeconomic factors – including aggregate and local
unemployment rates, generosity of the unemployment compensation system and
characteristics of the wage structure – as well as individual-specific determinants, including
proxies for general and specific human capital, length of unemployment spell and alternative
income sources. The longitudinal aspect of the dataset (the German Socio-Economic Panel)
provides an interesting perspective on how reservation wages change over time and how
they correlate with accepted wage offers for workers who make the transition from
unemployment to employment. The findings have important policy implications as well, since
they shed some light on the disincentive effects of the German tax and transfer system for
the labor supply and employment decisions of unemployed workers at different points of the
skill/offer wage distribution.
We use cookies to provide you with an optimal website experience. This includes cookies that are necessary for the operation of the site as well as cookies that are only used for anonymous statistical purposes, for comfort settings or to display personalized content. You can decide for yourself which categories you want to allow. Please note that based on your settings, you may not be able to use all of the site's functions.
Cookie settings
These necessary cookies are required to activate the core functionality of the website. An opt-out from these technologies is not available.
In order to further improve our offer and our website, we collect anonymous data for statistics and analyses. With the help of these cookies we can, for example, determine the number of visitors and the effect of certain pages on our website and optimize our content.