Unemployment Insurance and Reservation Wages: Evidence from Administrative Data

Thomas Le Barbanchon, Roland Rathelot and Alexandra Roulet
Additional contact information
Thomas Le Barbanchon: Bocconi University and CEPR
Alexandra Roulet: Harvard University and INSEAD

CAGE Online Working Paper Series from Competitive Advantage in the Global Economy (CAGE)

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.

Keywords: unemployment insurance; reservation wage. JEL Classification: J64 J65 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-eur and nep-ias
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

Downloads: (external link)
https://www2.warwick.ac.uk/fac/soc/economics/resea ... 30-2017_rathelot.pdf

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)
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:cge:wacage:330

Access Statistics for this paper

More papers in CAGE Online Working Paper Series from Competitive Advantage in the Global Economy (CAGE) Contact information at EDIRC.
Bibliographic data for series maintained by Jane Snape ().