Insurance-Markets Equilibrium with Double Indivisible Labor Supply
Insurance-Markets Equilibrium with Double Indivisible Labor Supply
Author(s): Aleksandar VasilevSubject(s): Economy, Human Resources in Economy
Published by: Univerzita Karlova v Praze - Institut ekonomických studií
Keywords: indivisible labor; public employment; insurance;
Summary/Abstract: 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.
Journal: Czech Economic Review
- Issue Year: 9/2015
- Issue No: 02
- Page Range: 91-103
- Page Count: 13
- Language: English