Reservation Wages and the Unemployment of Older Workers

Hila Axelrad, Israel Luski, Miki Malul

Research output: Contribution to journalArticlepeer-review

7 Scopus citations

Abstract

Our purpose is to examine the level of reservation wages among older unemployed (45+), and investigate what happens to the level of reservation wages as the length of unemployment increases. Using data from questionnaires completed by unemployed, we examined the reservation wages of 364 individuals and asked whether they would be willing to compromise in terms of their occupation, profession or geographic location to find a job. 112 of the participants responded to two questionnaires over a three-month period to determine the changes in their expectations over time. Additionally, we conducted qualitative interviews with 10 unemployed. We found that older people experienced longer periods of unemployment, and had a greater willingness to reduce salary expectations. The study establishes an innovative connection between older unemployed, reservation wages and the duration of unemployment, showing that higher reservation wages among older unemployed is the cause of prolonging their unemployment.

Original languageEnglish
Pages (from-to)206-227
Number of pages22
JournalJournal of Labor Research
Volume38
Issue number2
DOIs
StatePublished - 1 Jun 2017

Keywords

  • Older workers
  • Relative reservation wages
  • Reservation wages
  • Salary expectations
  • Unemployment duration

ASJC Scopus subject areas

  • Strategy and Management
  • Organizational Behavior and Human Resource Management
  • Management of Technology and Innovation

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