Effects of passive labour market policy on job search effort and reservation wages

Authors

  • Lorenzo Escot Universidad Complutense de Madrid
  • Kenedy Alva Universidad Complutense de Madrid
  • José Andrés Fernández Cornejo Universidad Complutense de Madrid

DOI:

https://doi.org/10.7203/IREP.4.1.24849

Abstract

In the job search process, the intensity and effort in the search are closely linked to the so-called acceptance wage or reservation wage, i.e., the minimum wage at which the worker will be willing to accept a job. In this paper we analyze the determinants of the reservation wage of unemployed job seekers. An empirical analysis is carried out to find evidence of the relationship between the reservation wage and the variables that affect the costs of the search process. We test how the time that the worker is unemployed while searching for a job has a negative effect on the reservation wage, but this effect is moderated by the receipt of some unemployment benefit. The data used come from a survey conducted in the Community of Madrid (Spain) in 2013, designed explicitly to study of the job search process during the economic crisis.

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Published

2022-07-14

How to Cite

Escot, L., Alva, K., & Fernández Cornejo, J. A. (2022). Effects of passive labour market policy on job search effort and reservation wages. International Review of Economic Policy-Revista Internacional De Política Económica, 4(1), 81–98. https://doi.org/10.7203/IREP.4.1.24849
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