The Impact of Restart on Reservation Wages and Long-Term Unemployment.

This paper examines the Restart program which consists of an interview of the long term unemployed to counsel them on effective job search. We estimate the elasticities of the reservation wage with respect to the benefit level and the arrival late rate of offers using nonparametric methods based on the optimal job search model for a sample who experience the Restart interview and for an experimental control group who are excluded from the interview. We also analyze the effect of the Restart program on reservation wages and long term unemployment duration via a simultaneous equation model. The results, indicate that the Restart program has no effect on the reservation wages of the long term unemployed. Copyright 1995 by Blackwell Publishing Ltd