Do Reservation Wages Really Decline? Some International Evidence On The Determinants Of Reservation Wages

Reservation wages play a key role in search theory, wherein optimal job search implies the reservation wage property and the optimal stopping rule. Despite its key role in theory, however, most empirical search studies have been conducted in the absence of reservation wage data, at best identifying this basic searchtheoretic element through theoretical and auxiliary restrictions (e.g. Bloemen and Stancanelli, 2001). For their part, the much sparser group of studies with direct evidence on reservation wages (surveyed in Devine and Kiefer, 1991) have largely been based on single survey responses, and typically contain little retrospective information about employment or income histories. And in neither case is there comparative evidence.