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The goal of the paper is to investigate how reservation wages of older unemployed welfare recipients change once they are no longer subject to standard job search requirements.

The authors apply a regression discontinuity design.

Consistent with theoretical predictions, the authors’ findings indicate that eliminating job search requirements will tend to increase reservation wages.

The results correspond to previous findings in the literature that monitoring leads to lower accepted wages and increased exits rates from unemployment, and that it may be a successful policy measure to keep older workers in the labor market.

Monitoring of job search effort has been shown to be an effective method of activating unemployed people, but little evidence has been found on the effect of activation measures on older workers.

The purpose of this paper is to explore the role of motivation to work in explaining workers’ pay flexibility – as measured by their reservation wage ratio – across the lifespan. This is important since pay inflexibility may undermine mature age workers’ retention at the workforce.

Relying on self-determination theory the paper broadens the role of “motivation to work” from the overall work valence an individual attaches to work to the underlying work values (i.e. the perceived value of work for its intrinsic vs extrinsic outcomes) and work motives (i.e. the underlying autonomous vs controlled reasons regulating one's work participation). The authors conducted hierarchical linear regression analyses on a sample of 1,577 Belgian workers to explore how individuals’ work values and work motives, in addition to work valence, shape workers’ reservation wage ratios across the lifespan.

Results indicate that work valence and holding relative intrinsic work values and relative autonomous work motives are associated with lower reservation wage ratios. Finally, age moderates all three relationships. Whereas the negative impact of work valence and relative autonomous work motives is stronger at older age, the negative impact of relative intrinsic work values is stronger at younger age.

Motivational predictors are differently related to reservation wage ratios across the lifespan.

By fostering overall work valence and autonomous work motivation practitioners can exert influence on mature age workers’ pay flexibility.

This study extends prior research on pay flexibility by focussing on the content of motivation to work (i.e. work values, work motives) and its role across the lifespan.

The purpose of this paper is to study gender differences in wage bargaining by comparing the unexplained wage gap in desired, realised and reservation wages.

The notion of desired wages is applied, which shows workers’ first bet to potential employers during the job-search process. A large job-search data set is drawn from the main Estonian electronic job-search site CV Keskus.

It is found that the unexplained gender wage gap is around 20 per cent in desired wages and in realised wages, which supports the view that the gender income gap in expectations compares well with the realised income gap. The unexplained gender wage gap is larger in desired wages than in reservation wages for unemployed individuals, and this suggests that women ask for wages that are closer to their reservation wages men do. Occupational and sectoral mobility is unable to explain a significant additional part of the gender wage gap.

The paper adds to the scarce empirical evidence on the role of the non-experimental wage negotiation process in the gender wage gap. In addition, the authors seek to explain one of the largest unexplained gender wage gaps in Europe, the one in Estonia, by introducing a novel set of variables for occupational and sectoral mobility from a lengthy retrospective panel.

This paper seeks to shed further light on the native‐migrant differences in economic outcomes. The aim is to investigate labor market reintegration, patterns of job search, and reservation wages across unemployed migrants and natives in Germany.

The paper is based on the IZA Evaluation Dataset, a recently collected rich survey of a representative sample of entrants into unemployment in Germany. The data include a large number of migration variables, allowing us to adapt a recently developed concept of ethnic identity: the ethnosizer. The authors analyze these data using the OLS technique as well as probabilistic regression models.

The results indicate that separated migrants have a relatively slow reintegration into the labor market. It can be argued that this group exerts a relatively low search effort and that it has reservation wages which are moderate, yet still above the level which would imply similar employment probabilities as other groups of migrants.

The findings indicate that special attention needs to be paid by policy makers to various forms of social and cultural integration, as it has significant repercussions on matching in the labor market.

The paper identifies a previously unmapped relationship between ethnic identity and labor market outcomes.

The objective of this chapter is to estimate the parameters defining female labor participation and occupation decisions in mexico. Based on a theoretical framework, we use micro data to estimate the wage-participation elasticity in urban Mexico. Consistency between the selectivity-adjusted wages and the multinomial participation equations is achieved via a two-step estimation procedure following Lee (1983). We use the results of our model to test and quantify three hypotheses explaining recent increases in female labor participation in urban mexico. Our results show that the observed 12 percent increase in female labor participation in mexico between 1994 and 2000 is explained by the combination of a negative income shock caused by the 1994–1995 participation; wage differentiaeso crisis, the increase in expected wages taking place in the manufacturing sector during the post-North American Free Trade Agreement (NAFTA) period, and a reduction in female reservation wage.

The purpose of this paper is to expand our understanding of the decisions on labour supply, with particular attention given to the role of conditions of a contract between an employer and an employee. In the paper the value, from the employee’s perspective, of different characteristics of an employment contract are assessed.

Discrete choice experiment methodology is applied to evaluate employment attributes. Using data from a dedicated survey of students and graduates of social sciences in Poland, parameters of the employment-related utility function are estimated with a multinomial logit model and random parameter logistic regression. Due to the opt-out alternative in the design, reservation wages for different types of contracts are calculated.

The paper suggests that development conditions and psychological aspects of work are extremely important for employees’ decisions and their reservation wages.

Due to limitations related to data generation process, generalisation of the results to the whole population is not possible.

The results of the study may help to develop tools of contract optimisation and remuneration systems. Such tools might lead to improvements in the efficiency of contracts in the labour market by simultaneously reducing employment costs and increasing workers’ utility.

The analysis of preferences and reservation wages contributes to our understanding of the observed wage differentials. It also helps to understand some apparent paradoxes of the labour supply behaviour, which are impossible to explain within the traditional approach to wage modelling.

We study the impact of tax and minimum wage reforms on the incidence of informality. To gauge the incidence of informality, we use measures of the extent of tax evasion, the extent of minimum wage noncompliance, and the size of the informal workforce. Our approach allows us to examine (i) the distinction between determinants of firm-level reported wage distribution and actual wage distribution, (ii) the complementarity of tax and minimum wage enforcement, (iii) the impact that a minimum wage reform has on tax and minimum wage compliance, and (iv) the impact that a tax policy reform has on tax and minimum wage compliance. We conclude with the design of optimal minimum wage and tax policies (even in the complete absence of minimum wage enforcement). We do so based on two objectives derived from popular concerns associated with an unchecked expansion of informality: tax revenue maximization, and poverty alleviation among workers.

In this paper a simultaneous-equations model of firm closing and wage determination is specified in order to analyse how wages adjust to unfavorable product demand shocks that raise the risk of displacement through firm closing, and to what extent an exogenous wage change affects the exit likelihood. Using a longitudinal matched worker-firm data set from Portugal, the estimation results suggest that, under the existence of noncompetitive rents, the fear of job loss leads workers to accept wage concessions, even though a compensating differential for the ex ante risk of displacement might exist. A novel result that emerges from this study is that firms with a higher incidence of minimum wage earners are more vulnerable to adverse shocks due to their inability to adjust wages downward. Indeed, minimum wage restrictions were seen to increase the failure rates.