Individual Wealth, Reservation Wages, and Transitions into Employment | Zendy

H. Bloemen | Zendy; Elena Stancanelli | Zendy

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Individual Wealth, Reservation Wages, and Transitions into Employment

Author(s) -

H. Bloemen,

Elena Stancanelli

Publication year - 2001

Publication title -

journal of labor economics

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 8.184

H-Index - 109

eISSN - 1537-5307

pISSN - 0734-306X

DOI - 10.1086/319566

Subject(s) - reservation , reservation wage , economics , labour economics , wage , sample (material) , political science , law , chemistry , chromatography

We investigate the relationship between financial wealth, reservation wages, and labor market transitions. Wealth is assumed to affect the level of the reservation wage and the employment probability. We test for the validity of this assumption by estimating a simultaneous-equations model of reservation wages, labor market transitions, and wealth. The data used for the analysis relate to a sample of unemployed job searchers. We use subjective information on the reservation wage. Wealth is found to have a significantly positive impact on the reservation wage. The overall impact of wealth on the employment probability is negative though small

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