Aggregation with a Labour-Supply Decision and Habits in Consumption

Vasilev, Aleksandar (2020) Aggregation with a Labour-Supply Decision and Habits in Consumption. Theoretical and Practical Research in the Economic Fields, 11 (2). pp. 117-119. ISSN 2068-7710

Full content URL: https://journals.aserspublishing.eu/tpref/article/...

Documents
Aggregation with a Labour-Supply Decision and Habits in Consumption
Accepted Manuscript
[img]
[Download]
[img]
Preview
PDF
aggregation_habits.pdf - Whole Document

173kB
Item Type:Article
Item Status:Live Archive

Abstract

The objective of this paper is to study the problem of a discrete labour supply decision in an artificial
economy where the households feature habits in consumption. We demonstrate how lotteries a la Rogerson (1988)
can be used to make consumption choices into convex sets, and then produce an equivalent aggregate household
with convex labour supply. The presence of consumption habits does not affect the main results of the paper. As
in Hansen (1985) and Rogerson (1988) and no consumption habits, with a discrete labor supply decision at
individual level, the elasticity of hours worked at the aggregate level increases from one to an infinitely large value.

Keywords:aggregation; indivisible labour; consumption habits
Subjects:L Social studies > L130 Macroeconomics
Divisions:Lincoln International Business School
ID Code:43449
Deposited On:26 Jan 2021 16:25

Repository Staff Only: item control page