The Determinants of Disparities in Reservation Wages
Early Career Research Grant
In this project, we will use uniquely rich data on reservation wages for a large, representative sample of US unemployment insurance recipients, collected through the Benefit Accuracy Management (BAM) program since 1987. It allows us to precisely describe the heterogeneity of the reservation wage to prior wage ratio, and analyze its changes over time as well as how it relates to labor market conditions. In a first part, this project will document cross-sectional differences in reservation wages across demographic groups. We will particularly explore the potential drivers of differences across races. In a second part, this project will investigate the influence of labor market conditions. For identification, we will leverage variation across sectors and states.