Unemployment Insurance and Reservation Wages: Evidence from Administrative Data

Thomas Le Barbanchon, Roland Rathelot and Alexandra Roulet

No 23406, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Although the reservation wage plays a central role in job search models, empirical evidence on the determinants of reservation wages, including key policy variables such as unemployment insurance (UI), is scarce. In France, unemployed people must declare their reservation wage to the Public Employment Service when they register to claim UI benefits. We take advantage of these rich French administrative data and of a reform of UI rules to estimate the effect of the potential benefit duration (PBD) on reservation wages and on other dimensions of job selectivity, using a difference-in-difference strategy. We cannot reject that the elasticity of the reservation wage with respect to PBD is zero. Our results are precise and we can rule out elasticities larger than 0.006. Furthermore, we do not find any significant effects of PBD on the desired number of hours, duration of labor contract and commuting time/distance. The estimated elasticity of actual benefit duration with respect to PBD of 0.3 is in line with the consensus in the literature. Exploiting a regression discontinuity design as an alternative identification strategy, we find similar results.

JEL-codes: J64 J65 (search for similar items in EconPapers)
Date: 2017-05
New Economics Papers: this item is included in nep-eur, nep-ias and nep-lab
Note: LS PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Published as Thomas Le Barbanchon & Roland Rathelot & Alexandra Roulet, 2017. "Unemployment insurance and reservation wages: Evidence from administrative data," Journal of Public Economics, .
Published as Unemployment Insurance and Reservation Wages: Evidence from Administrative Data , Thomas Le Barbanchon, Roland Rathelot, Alexandra Roulet. in Social Insurance Programs (Trans-Atlantic Public Economics Seminar, TAPES) , Gordon, Peichl, and Poterba. 2019

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Related works:
Journal Article: Unemployment insurance and reservation wages: Evidence from administrative data (2019)
Working Paper: Unemployment Insurance and Reservation Wages: Evidence from Administrative Data (2017)
Working Paper: Unemployment Insurance and Reservation Wages: Evidence from Administrative Data (2017)
Chapter: Unemployment Insurance and Reservation Wages: Evidence from Administrative Data (2016)
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