The Determinants of Reservation Wages in Germany Does a Motivation Gap Exist?

Björn Christensen

No 1024, Kiel Working Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: This paper investigates the reservation wages of unemployed persons on the basis of a job-search model with non-static reservation wages using panel data from Germany from 1987 to 1998. The results suggest that reservation wages are relatively high in Germany compared to other countries. Furthermore, pooled regression results show that most recent wages and personal characteristics of the unemployed are the most important determinants of reservation wages. In contrast neither unemployment duration nor different kinds of unemployment benefits influence reservation wages. Hence the findings corroborate the hypothesis that unemployed persons are not subject to strong financial pressure and thus have no significant motivation to find a new job.

Keywords: Pooled Regression; Unemployment; Labour Supply; Reservation Wages (search for similar items in EconPapers)
JEL-codes: C23 E24 J22 J64 (search for similar items in EconPapers)
Date: 2001
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Citations: View citations in EconPapers (15)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkwp:1024

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