A life-course perspective on labor supply: Temporal, institutional, and social embeddedness as determinants of individual reservation wages

A life-course perspective on labor supply: Temporal, institutional, and social embeddedness as determinants of individual reservation wages

(Third Party Funds Single)

Overall project:
Project leader:
Project members: ,
Start date: February 1, 2020
End date: January 31, 2022
Acronym:
Funding source: DFG-Einzelförderung / Sachbeihilfe (EIN-SBH)
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Abstract

Since the Hartz-legislation, the German labour market is
characterised by an increasing employment rate, a shortage of skilled
manpower, and a growing low-pay sector. Amplified by demographic
change, labour supply and especially the reservation wage become
central for understanding such labour markets. While economic
research has been investigating the determinants of reservation
wages and labour supply for quite some time, a sociological
investigation of this topic is still missing – despite substantial
theoretical and empirical research gaps. The outlined research project
aims to close these gaps and to develop a genuinely sociological
perspective on labour supply based on the life-course approach. In
particular, the effects of temporal, institutional, and social
embeddedness on individual reservation wages are the core of the
project. We develop theoretical models of these three forms of
embeddedness and test their predictions based on longitudinal data
of the Panel Study “Labour Market and Social Security” (PASS),
utilizing advanced methods of causal analysis. The projects puts
special emphasis on social groups, which – due to precarious life
situations and the institutional setting – may be forced to lower their
reservation salary and enter into lower-paid employment
relationships. By that, we not only close important research gaps in
our understanding of labour markets, but also contribute to the
research fields of social inequality and poverty.

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