Search, Layoffs, and Reservation Wages

1987 ◽  
Vol 5 (3) ◽  
pp. 354-365 ◽  
Author(s):  
Randall D. Wright
Keyword(s):  
Reservation Wages

Paradoxes of reservation wage setting in the Russian labor market. Part I

2016 ◽  
pp. 5-27
Author(s):  
R. Kapeliushnikov ◽  
A. Lukyanova
Keyword(s):  
Labor Market ◽  
Empirical Studies ◽  
Reservation Wage ◽  
Wage Setting ◽  
Reservation Wages ◽  
Monitoring Survey ◽  
Main Determinants ◽  
Subjective Estimates ◽  
Objective Indicators

Using panel data from the Russian Longitudinal Monitoring Survey for 2006-2014, the paper investigates reservation wages setting in the Russian labor market. The sample includes non-employed individuals wishing to get a job (both searchers and non-searchers). The first part of the paper provides a survey of previous empirical studies, describes data and analyzes subjective estimates of reservation wages in comparison with various objective indicators of actual wages. The analysis shows that wage aspirations of the majority of Russian non-employed individuals are overstated. However their wage expectations are rather flexible and decrease rapidly as the search continues that prevents high long-term unemployment. The second part of the paper provides an econometric analysis of main determinants of reservation wage and its impact on probability of re-employment and wages on searchers’ new jobs.

On the Economic Effects of Disobeyed Regulation in Employment Law

2017 ◽  
Vol 13 (2) ◽  
Author(s):  
Alon Harel ◽  
Yuval Procaccia ◽  
Ilana Ritov
Keyword(s):  
Consumer Protection ◽  
Welfare Effects ◽  
Employment Law ◽  
Economic Effects ◽  
Reservation Wages

AbstractMandatory restrictions in employment law, seeking to promote the welfare of workers, are debated fiercely. Proponents argue that they protect workers. Opponents believe that they spawn inefficiency and harm workers. Yet all agree that restrictions trigger such effects only when obeyed. This Article challenges the conviction that the welfare effects of mandatory restrictions depend on obedience. We show experimentally that when restrictions are disobeyed, workers’ reservation wages rise, i. e., workers charge higher wages when offered employment that violates the restrictions. That, in turn, produces welfare effects similar in nature to those produced when restrictions are obeyed. This observation is therefore important to both proponents and opponents of employment regulation. We establish this claim experimentally by measuring the effects of disobeyed restrictions on workers’ reservation wages. We then investigate several hypotheses as to why these effects are generated. Last, we point out that our findings have important implications in other contexts of contractual regulation, such as in the domain of consumer protection.

scholarly journals Can Insider Power Affect Employment?

2003 ◽  
Vol 4 (2) ◽  
pp. 139-150 ◽  
Author(s):  
Pilar Díaz-Vázquez ◽  
Dennis J. Snower
Keyword(s):  
Labor Market ◽  
Stochastic Model ◽  
Present Value ◽  
Reservation Wages ◽  
Theoretical Literature ◽  
Newly Hired

Abstract Do firms reduce employment when their insiders (established, incumbent employees) claim higher wages? The conventional answer in the theoretical literature is that insider power has no influence on employment, provided that the newly hired employees (entrants) receive their reservation wages. The reason given is that an increase in insider wages gives rise to a countervailing fall in reservation wages, leaving the present value of wage costs unchanged. Our analysis contradicts this conventional answer. We show that, in the context of a stochastic model of the labor market, an increase in insider wages promotes firing in recessions, while leaving hiring in booms unchanged. Thereby insider power reduces average employment.

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