{
  "title": "What Determines the Reservation Wages of Unemployed Workers? New Evidence From German Micro Data",
  "publication": "IMF Working Papers, January 1, 2003",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/30/what-determines-the-reservation-wages-of-unemployed-workers-new-evidence-from-german-micro-16249",
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  "summary": "This paper provides new empirical evidence on the relationship between reservation wages of unemployed workers and macroeconomic factors--including the unemployment rate and generosity of the unemployment compensation system--as well as individual-specific determinants, such as human capital proxies",
  "sections": [
    {
      "heading": "Summary",
      "content": "- Paper provides new empirical evidence on the relationship between reservation wages of unemployed workers and macroeconomic factors, including the unemployment rate and generosity of the unemployment compensation system.\n- Also analyzes individual-specific determinants, such as human capital proxies and length of unemployment spell.\n- Uses a longitudinal dataset to examine how reservation wages change over time and how they correlate with accepted wage offers for workers who move from unemployment to employment.\n- Findings highlight disincentive effects of the German tax and transfer system for employment decisions of unemployed workers at different skill levels."
    },
    {
      "heading": "Major findings",
      "content": "- Reservation wages are related to macroeconomic factors, including the unemployment rate and the generosity of the unemployment compensation system.\n- Individual-specific determinants, such as human capital proxies and length of unemployment spell, influence reservation wages.\n- Longitudinal evidence shows how reservation wages change over time for unemployed individuals.\n- Correlations exist between reservation wages and accepted wage offers for workers transitioning from unemployment to employment.\n- The German tax and transfer system produces disincentive effects on employment decisions, varying across skill levels."
    },
    {
      "heading": "Policy implications and recommendations (as indicated by findings)",
      "content": "- Consideration of how the generosity of unemployment compensation interacts with reservation wages when designing unemployment benefit policy.\n- Reassessment of tax and transfer configurations to mitigate identified disincentive effects on employment decisions, especially across different skill levels.\n- Use of longitudinal microdata in policy evaluation to capture dynamic changes in reservation wages and transitions from unemployment to employment.\n\nIMF Working Paper — What Determines the Reservation Wages of Unemployed Workers? New Evidence From German Micro Data; Eswar S Prasad; Working Paper No. 2003/004; DOI: https://doi.org/10.5089/9781451842067.001\n\n---\n\n Content in this bundle\n\n- wp0304\n  - wp0304 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - wp0304 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/30/what-determines-the-reservation-wages-of-unemployed-workers-new-evidence-from-german-micro-16249"
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    "Authors: Eswar S Prasad",
    "Published: January 1, 2003",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451842067.001",
    "Paper provides new empirical evidence on the relationship between reservation wages of unemployed workers and macroeconomic factors, including the unemployment rate and generosity of the unemployment compensation system.",
    "Also analyzes individual-specific determinants, such as human capital proxies and length of unemployment spell.",
    "Uses a longitudinal dataset to examine how reservation wages change over time and how they correlate with accepted wage offers for workers who move from unemployment to employment.",
    "Findings highlight disincentive effects of the German tax and transfer system for employment decisions of unemployed workers at different skill levels.",
    "Reservation wages are related to macroeconomic factors, including the unemployment rate and the generosity of the unemployment compensation system.",
    "Individual-specific determinants, such as human capital proxies and length of unemployment spell, influence reservation wages.",
    "Longitudinal evidence shows how reservation wages change over time for unemployed individuals.",
    "Correlations exist between reservation wages and accepted wage offers for workers transitioning from unemployment to employment.",
    "The German tax and transfer system produces disincentive effects on employment decisions, varying across skill levels.",
    "Consideration of how the generosity of unemployment compensation interacts with reservation wages when designing unemployment benefit policy.",
    "Reassessment of tax and transfer configurations to mitigate identified disincentive effects on employment decisions, especially across different skill levels.",
    "Use of longitudinal microdata in policy evaluation to capture dynamic changes in reservation wages and transitions from unemployment to employment.",
    "**_wp0304**"
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