Reservation Wages, Search Duration, and Accepted Wages in Europe

26 Pages Posted: 13 Aug 2004

See all articles by John T. Addison

John T. Addison

University of South Carolina - Moore School of Business - Department of Economics; IZA Institute of Labor Economics

Mário Centeno

Bank of Portugal - Research Department; Technical University of Lisbon - ISEG (School of Economis and Management); UECE (Research Unit on Complexity and Economics)

Pedro Portugal

Bank of Portugal - Research Department; New University of Lisbon; IZA Institute of Labor Economics

Date Written: August 2004

Abstract

This paper uses data from the European Community Household Panel, 1994-99, to investigate the arrival rate of job offers, the determinants of reservation wages, transitions out of unemployment, and accepted wages. In this exploratory treatment, we report that the arrival rate of job offers declines precipitously with jobless duration and age; that reservation wages do decline with the jobless spell (and aggregate unemployment); that transitions out of unemployment exhibit strong negative duration dependence for reasons that have more to do with the arrival rate of job offers than with reservation wages; and that the decline in reemployment wages with joblessness closely shadows the corresponding fall in reservation wages.

Keywords: reservation wages, job offer arrival rates, unemployment duration, reemployment wages

JEL Classification: J64, J65

Suggested Citation

Addison, John T. and Gomes de Freitas Centeno, Mário José and Portugal, Pedro, Reservation Wages, Search Duration, and Accepted Wages in Europe (August 2004). IZA Discussion Paper No. 1252. Available at SSRN: https://ssrn.com/abstract=576103

John T. Addison (Contact Author)

University of South Carolina - Moore School of Business - Department of Economics ( email )

The Francis M. Hipp Building
1705 College Street
Columbia, SC 29208
United States
803-777-7400 (Phone)
803-777-6876 (Fax)

HOME PAGE: http://mooreschool.sc.edu/moore/economics/profiles/addison.htm

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Mário José Gomes de Freitas Centeno

Bank of Portugal - Research Department ( email )

Av. Almirante Reis 71, 6th
Lisbon 1150-012
Portugal
351-213130837 (Phone)
351-218132221 (Fax)

Technical University of Lisbon - ISEG (School of Economis and Management)

Rua do Quelhas, 6
Lisboa, 1200-781
Portugal

HOME PAGE: http://www.iseg.utl.pt/docentes/docentes.php?qual=1249

UECE (Research Unit on Complexity and Economics) ( email )

ISEG/UTL, Rua Miguel Lupi 20
Lisboa, 1249-078
Portugal

Pedro Portugal

Bank of Portugal - Research Department ( email )

Av. Almirante Reis 71, 6th
Lisbon 1150-012
Portugal
+351 21 313 0000 (Phone)
+351 21 814 3841 (Fax)

New University of Lisbon

Lisbon, 1099-085
Portugal

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Register to save articles to
your library

Register

Paper statistics

Downloads
207
Abstract Views
1,269
rank
145,148
PlumX Metrics