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Journal Articles Journal of Labor Economics Year : 2001

Individual Wealth, Reservation Wages, and Transitions into Employment

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Hans Bloemen
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Abstract

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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Dates and versions

hal-01017002 , version 1 (01-07-2014)

Identifiers

  • HAL Id : hal-01017002 , version 1
  • SCIENCESPO : 2441/9704

Cite

Hans Bloemen, Elena Stancanelli. Individual Wealth, Reservation Wages, and Transitions into Employment. Journal of Labor Economics, 2001, 19 (2), pp.400-439. ⟨hal-01017002⟩
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