Search

How does impatience affect job search? More impatient workers search less intensively and set a lower reservation wage. The effect on the exit rate from unemployment is unclear. In this paper we show that, if agents have exponential time preferences, the reservation wage effect dominates for sufficiently patient individuals, so increases in impatience lead to higher exit rates. The opposite is true for agents with hyperbolic time preferences: more impatient workers search less and exit unemployment later. Using two large longitudinal data sets, we find that various measures of impatience are negatively correlated with search effort and the exit rate from unemployment, and are orthogonal to reservation wages. Overall, impatience has a large effect on job search outcomes in the direction predicted by the hyperbolic discounting model.

Following a breakthrough discovery, scientific knowledge with natural excludability may be best transferred to industry by the labor mobility of top scientists from universities and research institutes to firms. We model labor mobility as a function of scientist's quality (as measured by scientific citations) and his or her reservation wages which is determined by labor quality and the cost of moving, and also depends on the trial frequency, (number of potential firm employers), potential interfering offers from universities, and experienced increase in productivity of top scientists already in firms (reducing reservation values). Applying our model to bioscience and related industries, we find broad support in a group duration analysis. The time a star scientist remains in a university before moving to a firm is significantly decreased as the quality of the bioscientist and as her focus on human genetics increases; decreased as the expected frequency of offers increases with increases in local firms commercializing the technology and the percentage of ties to scientists outside the bioscientist's organization; decreased by experienced increase in productivity by other star scientists nearby who have already moved to firms. Only the number of top quality universities in the local area, via interfering university moves, increases the time a star scientist remains in a university before moving to a firm. We find some evidence of heterogeneity when we decompose the sample of bioscientists by their destination status, finding only quality remains significant across both affiliated scientists (full-time employment in a firm) and linked scientists (part-time employment), with all variables that are significant in the duration model also entering for linked scientists.

We investigate the relationship between financial wealth, reservation wages, and labor market transitions. Wealth is assumed to affect the level of the reservation wage and the employment probability. We test for the validity of this assumption by estimating a simultaneous-equations model of reservation wages, labor market transitions, and wealth. The data used for the analysis relate to a sample of unemployed job searchers. We use subjective information on the reservation wage. Wealth is found to have a significantly positive impact on the reservation wage. The overall impact of wealth on the employment probability is negative though small. Copyright 2001 by University of Chicago Press.

The authors discuss the concept of 'team human capital' and study the renegotiation of labor compensation after team members privately observe their own reservation wage. As labor productivity can only be high if the number of quits does not exceed a threshold, decisions concerning acceptance of individual wage demands become interdependent. When a team is made up of salaried workers, a peculiar case of efficiency wage results. Moreover, inefficient team dissolution may occur. The authors then show that inefficiency is less likely to occur when team members form a partnership. Copyright 1997 by University of Chicago Press.

Previous structural models of job search behavior have been based upon the reservation wage property. This article provides estimates of a more general search model that nests models with the reservation wage property. The estimates lead to rejection of the reservation wage property. The model includes hours of work in the utility function, but other nonwage job characteristics can be included as well. An experiment based on the estimated parameters indicates that a significant proportion of job offers would be mistakenly predicted to be accepted or rejected under the restrictions implied by the reservation wage property. Copyright 1991 by University of Chicago Press.

In this paper, a firm maximizes profits over choices of wage schedul es and hiring schedules in a model with (1) turnover costs, (2) a pro ductivity function that depends on position and experience, and (3) employee utility functions that depend on monetary compensation and position. It is shown that firms may have reason to encourage employe es to retire before their reservation wage is greater than their marg inal product. However, if an alternative definition of marginal produ ct is used, the usual relation holds. Copyright 1987 by University of Chicago Press.

This article formulates job search models, incorporating certain types of the "stigma" effect of unemployment. It is assumed that the probability of getting a job offer, given the unemployment individual contacts the firm, is influenced by the duration of unemployment and is justified in a signaling context. The optimal search is analyzed for one sector, as well as across several independent labor-market segments. It is shown that there are reasonably general conditions on the search environments, for which both the individual reservation wage and escape rate are negative-duration dependent, a fact observed in empirical studies. Copyright 1989 by University of Chicago Press.

Except in special cases, market work and household membership are jointly chosen. A Nash bargaining model of family behavior is used to specify stochastic structural relationships (two indirect utility functions and a market and a reservation wage function) that jointly determine work, consumption, and household membership. The maximum likelihood estimates of the implied trinomial probit model differ sharply from those obtained when either market work or household membership is taken as exogenous. This application to white male youths from the National Longitudinal Surveys shows the insurance function of families: parents insure their sons against poor market opportunities.