Question

Can reservation increase unemployment?

Answer 1

Unemployment benefits can be of a flat rate (the same for everyone) or depend on the previous wage level, which directly influences the level of the reservation wage. ...higher reservation wage leads to higher wage expectations and as a result makes finding a new job more difficult and prolongs the unemployment period.
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Answer 2

Yes because a percent increase in unemployment benefits is associated with a higher wage of 0.4 point . An increase in reservation wages in 1percent reduces the duration of unemployment by around 1.9%