Reservation wages and the earnings capacity of lone and couple mothers: Are wage expectations too high?

Matthew Gray and Jenny Renda

MPRA Paper from University Library of Munich, Germany

Abstract: This paper presents evidence on the extent to which non-employed mothers who would like to work are able to provide an estimate of their reservation income. There is virtually no existing Australian research on the extent to which jobseekers are able to estimate their reservation income. The paper also tests the hypothesis that unrealistic wage expectations are an important factor in explaining relatively low employment rates among mothers by comparing reservation hourly wages with the estimated earning capacity of mothers. If reservation wages are greater than what we estimate the mother would earn in the labour market, then this is likely to make it difficult to find employment.

Keywords: Employment; reservation wages; working hours (search for similar items in EconPapers)
JEL-codes: J22 J3 J38 (search for similar items in EconPapers)
Date: 2006
New Economics Papers: this item is included in nep-lab
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:1067

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