Insurance-Markets Equilibrium with Double Indivisible Labor Supply

Vasilev, Aleksandar (2016) Insurance-Markets Equilibrium with Double Indivisible Labor Supply. Czech Economic Review, 9 (2). pp. 91-103. ISSN 1802-4696

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This note describes the lottery- and insurance-market equilibrium in an economy with
both private and public sector employment and non-convex labor supply. In addition, when
households are constrained to search for jobs only in a certain sector, the framework requires
that there should be separate insurance markets: a public and a private sector one, which would
pool the unemployment risk of the corresponding group of households. The unemployment insurance
market segmentation is a new result in the literature and a direct consequence of the
non-convexity of the labor supply in each sector and the sorting effect of the sector-type shock
introduced in the model setup.

Keywords:indivisible labor, public employment, insurance
Subjects:L Social studies > L130 Macroeconomics
Divisions:Lincoln International Business School
ID Code:34012
Deposited On:16 Nov 2018 16:16

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