Reservation Wages (reservation + wage)

Distribution by Scientific Domains


Selected Abstracts


Reservation wages, labour market participation and health

JOURNAL OF THE ROYAL STATISTICAL SOCIETY: SERIES A (STATISTICS IN SOCIETY), Issue 3 2010
Sarah Brown
Summary., The concept of the reservation wage has played an important role in labour market theory, particularly in models of job search, labour supply and labour market participation. We focus on the determinants of reservation wages, with a particular focus on health, which has attracted very little attention despite its importance from a policy perspective. Using UK data we estimate an endogenous switching model which predicts reservation wages for the unemployed and market wages for the employed. Our results have important policy implications since they suggest that poor health is a major cause of economic inactivity. [source]


Measuring the effect of husband's health on wife's labor supply

HEALTH ECONOMICS, Issue 6 2006
Michele J. SiegelArticle first published online: 31 JAN 200
Abstract A sizable proportion of women remain married well into late life and an increasing proportion of them participate in the labor force. Since women tend to marry men older than themselves and men tend to experience serious illnesses at younger ages than women, women frequently witness declining health in their husbands. This is likely to affect a wife's labor,leisure trade-off in offsetting ways. Prior studies have not sought to disentangle the effect of a husband's poor health on his wife's reservation wage from the income effect of his ill health. We argue that, if we control for husband's earnings, the coefficient of husband's health in models of his wife's labor force participation (and hours of work) will reflect, in part, her preference over whether to decrease her labor supply to provide health care for her husband or whether to instead increase it to purchase this care in the market. However, husband's earnings are likely to be endogenous in these models due to unobserved characteristics common to husbands and wives. We find that the estimated effect of husband's health depends on whether we instrument for husband's earnings and on the health measure used. This is indicative of the importance of using a variety of health measures and controlling for husband's earnings, and their endogeneity, in future research on the effect of husband's health on wife's labor supply. Copyright 2006 John Wiley & Sons, Ltd. [source]


Reservation wages, labour market participation and health

JOURNAL OF THE ROYAL STATISTICAL SOCIETY: SERIES A (STATISTICS IN SOCIETY), Issue 3 2010
Sarah Brown
Summary., The concept of the reservation wage has played an important role in labour market theory, particularly in models of job search, labour supply and labour market participation. We focus on the determinants of reservation wages, with a particular focus on health, which has attracted very little attention despite its importance from a policy perspective. Using UK data we estimate an endogenous switching model which predicts reservation wages for the unemployed and market wages for the employed. Our results have important policy implications since they suggest that poor health is a major cause of economic inactivity. [source]


Why Do People from Southern Italy Seek Jobs in the Public Sector?

LABOUR, Issue 1 2003
Laura Pagani
This paper analyses the choice open to a worker seeking a job in the public and private sectors of the labour market. The private sector is identified by a steeper wage profile and by lower job security than the public sector. The reservation wage for the two sectors is calculated in the first part of the paper. The results reveal that the reservation wage for the public sector is higher than that for the private sector. The effect of career prospects, job riskiness and labour demand on optimal time allocation between the search in the two sectors is then analysed. Finally, an empirical analysis is made in order to study Italian workers' search strategies. It highlights relevant geographical differences which can be interpreted through the theoretical results obtained in the paper. [source]


Participation and Impact of Poverty-oriented Public Works Projects in Rural Malawi

DEVELOPMENT POLICY REVIEW, Issue 2 2002
Ephraim W. Chirwa
This article reports on factors influencing participation in the poverty-oriented public works programme in rural Malawi and analyses the determinants of the revealed positive socio-economic impact among the participants. The programme targets poor households through self-selection by offering a wage below the official minimum for rural areas. The empirical results show that most participants are poor and with little education. Probability of particpation is higher for members of female-headed households and households with longer periods of food insecurity, excess supply of labour, few assets and reservation wages below the wage offered in the programme. Taking account of selectivity bias, the impact of the programme increases with the gender (female) of participants and the numbers per household participating. [source]


Stepping from Illegality to Legality and Advancing towards Integration: The Case of Immigrants in Greece,

INTERNATIONAL MIGRATION REVIEW, Issue 4 2005
Nicholas P. Glytsos
This paper highlights how the social and economic situation of immigrants changes after their formal legalization and discusses what they nave to go through for their complete integration. Legalization can hardly solve the problem of immigrant employment, nor can it pull all immigrants out of the underground labor market and integrate them into the Greek economy ana society. The process towards complete integration is painful and involves a series of successive phases of various durations. During this period, apart from economic conditions, various institutional and cultural factors can hinder or delay integration. With respect to economic integration, immigrants seem to fare rather well. Their official unemployment rate is only slightly higher than the Greek unemployment rate, the two rates converging over time. This suggests increasing relative opportunities for immigrant employment, precarious or stable as it might be. Immigrant jobs come as a result of their flexible adjustment to the needs of the labor market - official or underground - compared to the inflexibility in the supply of Greek workers, due to labor mismatches and relatively high reservation wages. Wages of immigrants are generally lower, but are approaching the wages of their Greek counterparts. Educated immigrants much more than educated Greeks are forced by the circumstances to exercise jobs not measuring up to their qualifications. [source]


Reservation wages, labour market participation and health

JOURNAL OF THE ROYAL STATISTICAL SOCIETY: SERIES A (STATISTICS IN SOCIETY), Issue 3 2010
Sarah Brown
Summary., The concept of the reservation wage has played an important role in labour market theory, particularly in models of job search, labour supply and labour market participation. We focus on the determinants of reservation wages, with a particular focus on health, which has attracted very little attention despite its importance from a policy perspective. Using UK data we estimate an endogenous switching model which predicts reservation wages for the unemployed and market wages for the employed. Our results have important policy implications since they suggest that poor health is a major cause of economic inactivity. [source]


With Friends Like These: Endogenous Labor Market Segregation with Homogeneous, Nonprejudiced Agents

AMERICAN JOURNAL OF ECONOMICS AND SOCIOLOGY, Issue 3 2009
Article first published online: 3 JUN 200, Tavis Barr
In the economics literature, labor market segregation is typically assumed to arise either from prejudice (Becker 1971) or from group differences in human capital accumulation (Benabou 1993; Durlauf 2006; Fryer 2006). Many sociological studies, by contrast, consider social network structure as an embodiment of various forms of social capital, including the creation of obligations, information channels, and enforceable trust (Coleman 1988; Portes and Sensenbrenner 1993). When firms hire by referral, social network segregation can lead to labor market segregation (Tilly 1998). Various social network structures may arise from the actions of self-interested individuals (Watts and Strogatz 1998; Jackson 2006); by incorporating concepts of social capital into an economic framework of profit-maximizing firms, this article develops a model of labor markets in which segregation arises endogenously even though agents are homogeneous and have no dislike for each other. Firms hire through referrals, and can enforce discipline by bribing a referrer to prevent a hiree from getting any outside job offers from other friends if he or she shirks. This is possible only if social networks are reasonably closed, so that the referee knows a majority of his or her friends' friends. By segregating into small communities, workers can more effectively create closed social networks. Social networks with different reservation wages will receive different wages; firms can induce such segregation and wage discrimination in the interest of profit. Workers may not benefit from such segregation, except as a best response to being in a society where it already exists; the "friends" in these social networks act as a worker discipline device, and in this way treat each other inimically. [source]


Scale Effects in Markets with Search,

THE ECONOMIC JOURNAL, Issue 508 2006
Barbara Petrongolo
Estimates of aggregate matching functions may miss important scale effects in frictional labour markets because of the reactions of job seekers to scale. We estimate a semi-structural model of search and matching on a British sample of unemployed people, testing for scale effects on the probability of receiving an offer and on the distribution of wage offers. We find them only in wage offers but we also find that reservation wages rise to deliver higher post-unemployment wages but not faster matches. So aggregate matching functions should be unaffected by scale but wage equations should be showing them. [source]