Umeå University's logo

umu.sePublications
Change search
CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf
Minimum wage effects on reservation wages
Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE), Economics.ORCID iD: 0000-0001-9244-7018
2022 (English)In: Journal of Labor Research, ISSN 0195-3613, E-ISSN 1936-4768, Vol. 43, p. 415-439Article in journal (Refereed) Published
Abstract [en]

Reservation wages are part of the transmission mechanism between minimum wages and unemployment via the labour force participation decision. The limited available empirical evidence on the relationship between reservation wages and legal minimum wages suggest that individuals use minimum wages as benchmarks against which their reservation wages are set. This has a profound behavioural effect that may encourage individuals to either enter the labour force or price themselves out of potential employment. We employ a fuzzy regression discontinuity design to explore the influence of minimum wages on reservation wages. Our findings suggest that the behavioural response is too small to be extracted from the variability of the reservation wage data. For policy makers this finding is important. While minimum wages raise earnings and living standards, they can push some workers out of the labour force by increasing their reservation wage beyond the minimum. We do not find any evidence of such a response of the reservation wage of jobseekers to the minimum wage in the UK.

Place, publisher, year, edition, pages
Springer, 2022. Vol. 43, p. 415-439
Keywords [en]
Minimum wages, Reservation wages, Fuzzy regression discontinuity, Participation rate, Unemployment, Employment
National Category
Economics
Research subject
Economics
Identifiers
URN: urn:nbn:se:umu:diva-201052DOI: 10.1007/s12122-022-09337-yISI: 000878448500001Scopus ID: 2-s2.0-85141185078OAI: oai:DiVA.org:umu-201052DiVA, id: diva2:1711299
Available from: 2022-11-16 Created: 2022-11-16 Last updated: 2022-12-30Bibliographically approved

Open Access in DiVA

fulltext(1583 kB)145 downloads
File information
File name FULLTEXT02.pdfFile size 1583 kBChecksum SHA-512
cf52ebb3efb20fba656ed09370f5aab9f59c16099e2262149956ff8cba4ec36007d65f2171a90b38802d81bb8b04729445f5ea834a08e490b392786d87404e39
Type fulltextMimetype application/pdf

Other links

Publisher's full textScopus

Authority records

Lanot, Gauthier

Search in DiVA

By author/editor
Sousounis, PanosLanot, Gauthier
By organisation
Economics
In the same journal
Journal of Labor Research
Economics

Search outside of DiVA

GoogleGoogle Scholar
Total: 172 downloads
The number of downloads is the sum of all downloads of full texts. It may include eg previous versions that are now no longer available

doi
urn-nbn

Altmetric score

doi
urn-nbn
Total: 459 hits
CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf