|Generate QR code
Open Access
Subscription Access
Paradoxes of reservation wage setting in the Russian labor market. Part I
https://doi.org/10.32609/0042-8736-2016-8-5-27
Abstract
Using panel data from the Russian Longitudinal Monitoring Survey for 2006-2014, the paper investigates reservation wages setting in the Russian labor market. The sample includes non-employed individuals wishing to get a job (both searchers and non-searchers). The first part of the paper provides a survey of previous empirical studies, describes data and analyzes subjective estimates of reservation wages in comparison with various objective indicators of actual wages. The analysis shows that wage aspirations of the majority of Russian non-employed individuals are overstated. However their wage expectations are rather flexible and decrease rapidly as the search continues that prevents high long-term unemployment. The second part of the paper provides an econometric analysis of main determinants of reservation wage and its impact on probability of re-employment and wages on searchers’ new jobs.
About the Authors
R. Kapeliushnikov
Institute of World Economy and International Relations, Russian Academy of Sciences; Centre for Labour Market Studies, National Research University Higher School of Economics
Russian Federation
Russian Federation
A. Lukyanova
Centre for Labour Market Studies, National Research University Higher School of Economics
Russian Federation
Russian Federation
References
1. Addison J. T., Machado J. A. F., Portugal P. (2010). The reservation wage unemployment duration nexus. IZA Discussion Paper, No. 5077.
2. Blackaby D. H., Latreille P. L., Murphy P. D., O’Leary N. C., Sloane P. J. (2007). An analysis of reservation wages for the economically inactive. Economics Letters, Vol. 97, No. 1, pp. 1-5.
3. Blien U., Messmann S., Trappmann M. (2012). Do reservation wages react to regional unemployment? Institute for Employment Research. IAB Discussion Paper, No. 22/2012.
4. Bloemen H. G., Stancanelli E. G. F. (2001). Individual wealth, reservation wages, and transitions into employment. Journal of Labor Economics, Vol. 19, No. 2, pp. 400-439.
5. Brown S., Taylor K. (2011). Reservation wages, market wages and unemployment: Analysis of individual level panel data. Economic Modelling, Vol. 28, No. 3, pp. 1317-1327.
6. Brown S., Taylor K. (2013). Reservation wages, expected wages and unemployment. Economics Letters, Vol. 119, No. 3, pp. 276-279.
7. Christensen B. (2001). Determinants of reservation wages in Germany. Does a motivation gap exist? Kiel Working Paper, No. 1024. Kiel: Kiel Institute of the World Economics.
8. Christensen B. (2002). Reservation wages, offered wages, and unemployment duration - New empirical evidence. Kiel Working Paper, No. 1095. Kiel: Kiel Institute of the World Economics.
9. Dawes L. (1993). Long-term unemployment and labour market flexibility. Leicester: Centre for Labour Market Studies, University of Leicester, UK.
10. Fishe R. P. H. (1982). Unemployment insurance and the reservation wage of the unemployed. Review of Economics and Statistics, Vol. 64, No. 1, pp. 12-17.
11. Franz W. (1980). The reservation wage of unemployed persons in the Federal Republic of Germany: Theory and empirical tests. NBER Working Paper, No. 578.
12. Hinnosaar M. (2003). Reservation wage, job search intensity and unemployment benefits. In: Labour Market Research in Estonia. Tallinn: Eesti Pank, pp. 95-111.
13. Hogan V. (1999). The determinants of the reservation wage. UCD Centre for Economics Research Working Paper, No. WP99/16. Dublin: University College Dublin.
14. Hogan V. (2004). Wage aspirations and unemployment persistence. Journal of Monetary Economics, Vol. 51, No. 8, pp. 1623-1643.
15. Jones S. R. G. (1988). The relationship between unemployment spells and reservation wages as a test of search theory. Quarterly Journal of Economics, Vol. 103, No. 4, pp. 741-765.
16. Jones S. R. G. (1989). Reservation wages and the cost of unemployment. Economica, Vol. 56, No. 222, pp. 225-246.
17. Kiefer N. M., Neuman G. (1979). An empirical jobsearch model, with a test of the constant reservationwage hypothesis. Journal of Political Economy, Vol. 87, No. 1, pp. 89-107.
18. Kingdon G., Knight J. (2001). What have we learnt about unemployment from microdatasets in South Africa? Social Dynamics, Vol. 27, No. 1, pp. 79-95.
19. Krueger A. B., Mueller A. I. (2014). A contribution to the empirics of reservation wages. NBER Working Paper, No. 19870.
20. Lancaster T., Chesher A. (1983). An econometric analysis of reservation wages. Econometrica, Vol. 51, No. 6, pp. 1661-1676.
21. Malk L. (2014). Determinants of reservation wages: Empirical evidence for Estonia. Eesti Pank Working Paper Series, No. 8/2014.
22. Mortensen D. T. (1986). Job search and labor market analysis. In: O. Ashenfelter, R. Layard (eds.). Handbook of Labor Economics. Amsterdam: NorthHolland. Vol. 2, pp. 849-919.
23. Patrizio P., Zoch A. (2015). How reliable are self-reported reservation wages? Evidence from South Africa. Unpublished manuscript, University of Cape Town.
24. Petterson S. M. (1997). Are young black men really less willing to work? American Sociological Review, Vol. 62, No. 4, pp. 605-613.
25. Pissarides C. (2000). Equilibrium unemployment theory. Cambridge, MA: MIT Press.
26. Prasad E. S. (2003). What determines the reservation wages of unemployed workers? New evidence on German micro data. IMF Working Paper, No. WP/03/4.
Review
For citations:
Kapeliushnikov R., Lukyanova A. Paradoxes of reservation wage setting in the Russian labor market. Part I. Voprosy Ekonomiki. 2016;(8):5-27. (In Russ.) https://doi.org/10.32609/0042-8736-2016-8-5-27
Views:
728
Email this article 
