Unemployment Insurance and Reservation Wages: Evidence from Administrative Data

AbstractThis paper examines the impacts on reservation wages of unemployed persons and on transition in employment due to the reform of the unemployment insurance system in Germany in the course of the Agenda 2010. An dynamic search-model is developed, on which reservation wages are simulated for different groups of unemployed. Afterwards, increases in the transition rates in employment are forecasted due to the reductions in reservation wages. It is shown that the reform of the unemployment transfer payments mainly affect unemployed persons with a high income before unemployment. For these persons the transition rates in employment are increased by 5% to 9% if they are eligible for social welfare. For unemployed persons without eligibility for social welfare the transition rates in employment are increased by 9% to 22%.

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Reservation Wages and Unemployment Insurance

SSRN Electronic Journal ◽

10.2139/ssrn.902066 ◽

2006 ◽

Author(s):

Robert J. Shimer ◽

Ivan Werning

Keyword(s):

Unemployment Insurance ◽

Reservation Wages

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Is Unemployment Insurance Addictive? Evidence from the Benefit Durations of Repeat Users

ILR Review ◽

10.1177/001979399304700105 ◽

1993 ◽

Vol 47 (1) ◽

pp. 62-72 ◽

Cited By ~ 3

Author(s):

Miles Corak

Keyword(s):

Administrative Data ◽

Unemployment Insurance ◽

Descriptive Statistics ◽

Unemployment Benefits ◽

The Past

The author finds evidence that the past occurrence of a spell of insured unemployment lengthens the duration of future spells. Descriptive statistics from Canadian administrative data covering mid-1971 to early 1990 suggest that unemployment insurance (UI) claimants tend to spend a longer and longer time collecting benefits with each additional claim they make. This finding contradicts the implication of static neoclassical models that successive UI spells should be of the same length. The author hypothesizes that the stigma attached to receiving unemployment benefits erodes with each new UI claim an individual files.

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Finite duration of unemployment insurance, reservation wages and participation in the job market

Journal of Public Economics ◽

10.1016/0047-2727(93)90094-a ◽

1993 ◽

Vol 50 (3) ◽

pp. 407-427 ◽

Cited By ~ 2

Author(s):

JoséM. Usategui

Keyword(s):

Unemployment Insurance ◽

Job Market ◽

Finite Duration ◽

Reservation Wages ◽

Duration Of Unemployment

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Earnings Losses of Displaced Workers Revisited

The American Economic Review ◽

10.1257/aer.100.1.572 ◽

2010 ◽

Vol 100 (1) ◽

pp. 572-589 ◽

Cited By ~ 218

Author(s):

Kenneth A Couch ◽

Dana W Placzek

Keyword(s):

Administrative Data ◽

Unemployment Insurance ◽

Fixed Effects ◽

Panel Study ◽

Displaced Workers ◽

Income Dynamics ◽

Matching Estimators ◽

Earnings Losses ◽

Random Growth ◽

Mass Layoff

Earnings losses of Connecticut workers affected by mass layoff are calculated using administrative data. Estimated reductions are initially more than 30 percent and six years later, as much as 15 percent. The Connecticut estimates are smaller than comparable ones from Pennsylvania administrative data but similar to those from the Panel Study of Income Dynamics (PSID) and Department of Workforce Services (DWS). Earnings reductions in Connecticut and Pennsylvania are concentrated among Unemployment Insurance recipients. An unusually high proportion of Unemployment Insurance beneficiaries in Pennsylvania explains the larger estimated losses relative to other studies. Fixed-effects, random growth, and matching estimators produced similar earnings loss estimates suggesting each is relatively unbiased in this context.

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The Effect of Unemployment Benefits and Nonemployment Durations on Wages

The American Economic Review ◽

10.1257/aer.20141566 ◽

2016 ◽

Vol 106 (3) ◽

pp. 739-777 ◽

Cited By ~ 69

Author(s):

Johannes F. Schmieder ◽

Till von Wachter ◽

Stefan Bender

Keyword(s):

Unemployment Insurance ◽

Instrumental Variable ◽

Reservation Wage ◽

Unemployment Benefits ◽

Reservation Wages ◽

Wage Effects ◽

Key Policy

We estimate that unemployment insurance (UI) extensions reduce reemployment wages using sharp age discontinuities in UI eligibility in Germany. We show this effect combines two key policy parameters: the effect of UI on reservation wages and the effect of nonemployment durations on wage offers. Our framework implies if UI extensions do not affect wages conditional on duration, then reservation wages do not bind. We derive resulting instrumental variable estimates for the effect of nonemployment durations on wage offers and bounds for reservation wage effects. The effect of UI on wages we find arises mainly from substantial negative nonemployment duration effects. (JEL J31, J64, J65)

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Job Search by Unemployed Women: Determinants of the Asking Wage

ILR Review ◽

10.1177/001979398003300307 ◽

1980 ◽

Vol 33 (3) ◽

pp. 368-378 ◽

Cited By ~ 6

Author(s):

Steven H. Sandell

Keyword(s):

Least Squares ◽

Unemployment Insurance ◽

Job Search ◽

Search Behavior ◽

Longitudinal Survey ◽

National Longitudinal Survey ◽

Two Stage ◽

Reservation Wages ◽

Mature Women ◽

Job Search Behavior

This study uses actual observations of reservation wages from the National Longitudinal Survey of Mature Women who were 35 to 49 years of age in 1972 to estimate, with a two-stage least squares procedure, a model of the job-search behavior of unemployed women. To a greater extent than shown by most previous studies, the results indicate that unemployed women substantially reduce their reservation wages as the period of their unemployment progresses. Also, recipients of unemployment insurance are shown to ask for wages that are substantially higher than those asked for by other unemployed women.

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