Zoom: https://umich.zoom.us/s/93104955652?pwd=Lf6ebHXZHCdHLerJmE2pcTHPjE8iqv.1#success
Meeting ID: 931 0495 5652
Passcode: 975857

Abstract:
We study reservation wages using innovative longitudinal data on unemployment insurance (UI) recipients, guided by canonical search models. Individual-level expectations about the path of own reservation wages are, on average, consistent with realized reservation wage paths. This first result validates a basic premise in many models of job search by the unemployed. Second, individual-level reservation wages fall with unemployment duration and they fall faster when maximum unemployment benefit durations are shorter, confirming basic implications of search models. Third, unemployed job seekers reduce their reservation wages in line with predictions from calibrated versions of Mortensen’s (1977) canonical model, but set initial reservation wages too high. Fourth, reservation wages elicited early in unemployment spells are more powerful predictors of re-employment wages than are wages on the previous job, confirming the information value of survey-elicited reservation wages.


Short bio:
Pawel Krolikowski is a Senior Research Economist at the Federal Reserve Bank of Cleveland. His research focuses on labor economics and macroeconomics, with particular interests in job displacement, wage adjustment, and the effects of job loss. His work has been published in the American Economic Review, American Economic Journal: Macroeconomics, Journal of International Economics, and other journals. He received his PhD in Economics from the University of Michigan and holds undergraduate degrees in economics and mathematical and computational science from Stanford University.