Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/34366 
Year of Publication: 
2007
Series/Report no.: 
IZA Discussion Papers No. 2806
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
This study examines the relationship between individual risk aversion and reservation wages using a novel set of direct measures of individual risk attitudes from the German Socio-Economic Panel (SOEP). We find that risk aversion has a significantly negative impact on the level of reservation wages. Moreover, we show that the elasticity of the reservation wage with respect to unemployment benefits is remarkably lower for risk-averse job seekers than for risk-loving job seekers. The results are consistent with an interpretation that risk-averse job seekers set their reservation wage levels sufficiently low, so that they accept almost every job offer.
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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