Insurance-markets Equilibrium with Sequential Non-convex Straight-time and Over-time Labor Supply

Vasilev, Aleksandar (2018) Insurance-markets Equilibrium with Sequential Non-convex Straight-time and Over-time Labor Supply. Journal of Mathematical Economics and Finance, 4 (2(7)). pp. 1-17. ISSN 2458-0813

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Insurance-markets Equilibrium with Sequential Non-convex Straight-time and Over-time Labor Supply

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Abstract

This note describes the lottery - and insurance-market equilibrium in
an economy with non-convex straight-time and overtime employment. In contrast to
Hansen and Sargent (1988), the overtime-decision is a sequential one. This requires
two separate insurance market to operate, one for straight-time work, and one for
overtime. In addition, given that the labor choice for regular and overtime hours is
made in succession, the insurance market for overtime needs to open once the insurance market has closed. This segmentation and sequentiality of insurance markets
operation is a new result in the literature and a direct consequence of the sequential
nature of the overtime labor decision.

Keywords:Indivisible labor, straight time, overtime, sequential lotteries, insurance
Subjects:L Social studies > L130 Macroeconomics
L Social studies > L120 Microeconomics
Divisions:Lincoln International Business School
ID Code:35516
Deposited On:08 Apr 2019 12:55

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