Black-White Differences in Reservation Wages and Joblessness: A Replication

Abstract

Examining self-reported reservation wages from the 1979-80 waves of the National Longitudinal Survey of Youth (NLSY), Holzer concludes that 26 to 42 percent of the race difference in the length of jobless spells is due to the higher wages sought by young Black men. This replication uses NLSY reservation wage data from 1979 through 1986. Although I find a Black-White difference in reservation wages, I fail to find a positive effect of these measures on the duration of jobless spells. Thus, evidence from the NLSY does not support the claim that reservation wage differences explain the race employment gap.