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Wage Inequality, Reservation Wages and Labor Market Participation

Möller, Joachim ; Aldashev, Alisher



Abstract

This article presents an analysis of the variation of gender-specific labor-market participation rates across regions. A search-theoretical model with intertemporal optimization behavior of agents suggests that a higher regional wage level fosters participation, whereas higher unemployment discourages workers. The authors extend the standard model by introducing two measures of dispersion, one ...

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