Search, Layoffs, and Reservation Wages

Randall Wright

Journal of Labor Economics, 1987, vol. 5, issue 3, 354-65

Abstract: The author analyzes job-search models with random layoffs in which employment opportunities are characterized by a wage and some measure of risk. Intuition suggests that a worker ought to demand a higher wage if he is to accept a job with a higher layoff rate, but this is not true in several models analyzed in the literature. The author demonstrates that assumptions about what happens immediately after a layoff and after a quit are critical in determining the relation between reservation wages and risk. Making these assumptions explicit clarifies the reasons why different models imply quite different predictions. Copyright 1987 by University of Chicago Press.

Date: 1987
References: Add references at CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
http://dx.doi.org/10.1086/298151 full text (application/pdf)
Access to full text is restricted to subscribers. See http://www.journals.uchicago.edu/JOLE for details.

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:ucp:jlabec:v:5:y:1987:i:3:p:354-65

Access Statistics for this article

More articles in Journal of Labor Economics from University of Chicago Press
Bibliographic data for series maintained by Journals Division ().