Reservation Wages and Labor Supply
Iris Kesternich (),
Bettina Siflinger and
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Bettina Siflinger: Tilburg University, Center For Economic Research
No 2018-054, Discussion Paper from Tilburg University, Center for Economic Research
We test what survey measures of the reservation wage reveal about individual labor supply, i.e., an individual’s willingness to substitute leisure by consumption. To this end, we combine the reservation wage measure from a large labor market survey with the reservation wage for a one-hour job that we elicit in an online experiment. We find that these two measures are highly correlated. On average, the experimental reservation wage increases by 50 Cents for every Euro increase in the survey measure.
Keywords: reservation wages; labor supply; search; validation of survey measures (search for similar items in EconPapers)
JEL-codes: C83 C91 J22 (search for similar items in EconPapers)
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