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The Reservation Wage Unemployment Duration Nexus

Addison, J.T.; Machado, J.A.F.; Portugal, P.

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Authors

J.A.F. Machado

P. Portugal



Abstract

A thorny problem in identifying the determinants of reservation wages and particularly the role of continued joblessness in their evolution is the simultaneity issue. We deploy a control function approach to the problem that involves conditioning elapsed duration on completed unemployment duration in the reservation wage equation. Our analysis confirms that the use of elapsed duration alone compounds two separate and opposing influences. Only with the inclusion of completed duration is the negative effect of continued joblessness on reservation wages apparent.

Journal Article Type Article
Publication Date Dec 1, 2013
Deposit Date Aug 28, 2013
Publicly Available Date May 23, 2014
Journal Oxford Bulletin of Economics and Statistics
Print ISSN 0305-9049
Electronic ISSN 1468-0084
Publisher Wiley
Peer Reviewed Peer Reviewed
Volume 75
Issue 6
Pages 980-987
DOI https://doi.org/10.1111/j.1468-0084.2012.00717.x
Public URL https://durham-repository.worktribe.com/output/1471299

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Copyright Statement
This is the peer reviewed version of the following article: Addison, J.T. and Machado, J.A.F. and Portugal, P. (2013) 'The reservation wage unemployment duration nexus.', Oxford bulletin of economics and statistics., 75 (6). pp. 980-987, which has been published in final form at http://dx.doi.org/10.1111/j.1468-0084.2012.00717.x. This article may be used for non-commercial purposes in accordance With Wiley Terms and Conditions for self-archiving.





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