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Do Reservation Wages Really Decline? Some International Evidence on the Determinants of Reservation Wages
2008
Authors
Publication Year
2008
JEL Code
J64 - Unemployment: Models, Duration, Incidence, and Job Search
J65 - Unemployment Insurance; Severance Pay; Plant Closings
Abstract
Using cross-country data, we investigate the determinants of reservation wages and their course over the jobless spell. Higher unemployment benefits lead to higher reservation wages. Further, repeated observations on the same individual provide scant evidence of declining reservation wages.
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