Interplay Between Reservation Wage and Unemployment Duration: Evidence from Jordan, Serbia, Montenegro, Ukraine and Moldova in 2015

Tereza Kochovska ()

Business and Economic Research, 2020, vol. 10, issue 1, 120-132

Abstract: This study investigates the reservation wage along with the unemployment duration of the youth in five countries from three groups of countries, the MENA countries, the WB countries and the CIS countries. The study assesses the determinants of the reservation wage and in particular how it is related to unemployment duration. The data comes from the School to Work Transition Survey in 2015 which is a survey that is labor market designed and includes labor market information on young people aged 15 to 29 years. The Two Stage Least Square (2SLS) model is conducted by using instrumental variables. This technique is used since we suspect that ednogeneity between the reservation wage and the unemployment duration is possible in our model. The results suggest the interplay between the reservation wage and the unemployment duration is countercyclical, the longer the unemployment duration the lower the reservation wage. Youth that lives in a household that receives other sources of income and remittances have lower reservation wages and youth that comes from a household with good financial situation and receives governmental financial assistance have higher reservation wages. Married youth with children have higher reservation wage and lower unemployment duration and more educated and trained youth has higher reservation wage.

Keywords: Reservation wage; Unemployment duration; 2SLS model; Youth unemployment; Remittances (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.macrothink.org/journal/index.php/ber/article/view/15821/12493 (application/pdf)
http://www.macrothink.org/journal/index.php/ber/article/view/15821 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mth:ber888:v:10:y:2020:i:1:p:120-132

Access Statistics for this article

Business and Economic Research is currently edited by Daisy Young

More articles in Business and Economic Research from Macrothink Institute
Bibliographic data for series maintained by Technical Support Office ( this e-mail address is bad, please contact ).