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Insurance-markets Equilibrium with a Non-convex Labor Supply decision, Unobservable Effort, and Efficiency Wages of the "No-shirking" Type

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  • Vasilev, Aleksandar

Abstract

The purpose of this paper is to describe the lottery- and insurance-market equilibrium in an economy with non-convex labor supply decision, unobservable effort, and efficiency wages of the no-shirking type a la Shapiro and Stiglitz (1984). The presence of indivisible labor creates a market incompleteness, which requires that an insurance market for (un)employment be put in operation to "complete" the market.

Suggested Citation

  • Vasilev, Aleksandar, 2019. "Insurance-markets Equilibrium with a Non-convex Labor Supply decision, Unobservable Effort, and Efficiency Wages of the "No-shirking" Type," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 0(1 [accept).
    • Handle: RePEc:zbw:espost:195932
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    References listed on IDEAS

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    1. Aleksandar VASILEV, 2018. "Aggregation With A Non-Convex Labor Supply Decision, Unobservable Effort, And Incentive (“Fair”) Wages," Theoretical and Practical Research in the Economic Fields, ASERS Publishing, vol. 9(2), pages 144-147.
    2. Vasilev, Aleksandar, 2019. "Insurance-markets Equilibrium with a Non-convex Labor Supply decision, Unobservable Effort, and Efficiency Wages of the "No-shirking" Type," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 0(1 [accept).
    3. Craig Burnside & Martin S. Eichenbaum & Jonas D. M. Fisher, 1999. "Fiscal shocks in an efficiency wage model," Working Paper Series WP-99-19, Federal Reserve Bank of Chicago.
    4. Vasilev, Aleksandar, 2016. "A Real-Business-Cycle model with efficiency wages and fiscal policy: the case of Bulgaria," EconStor Preprints 148413, ZBW - Leibniz Information Centre for Economics.
    5. Burnside, Craig & Eichenbaum, Martin, 1996. "Factor-Hoarding and the Propagation of Business-Cycle Shocks," American Economic Review, American Economic Association, vol. 86(5), pages 1154-1174, December.
    6. Burnside, Craig & Eichenbaum, Martin & Rebelo, Sergio, 1993. "Labor Hoarding and the Business Cycle," Journal of Political Economy, University of Chicago Press, vol. 101(2), pages 245-273, April.
    7. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-444, June.
    8. Hansen, Gary D., 1985. "Indivisible labor and the business cycle," Journal of Monetary Economics, Elsevier, vol. 16(3), pages 309-327, November.
    9. Vasilev, Aleksandar, 2018. "Aggregation with non-convex labor supply, unobservable effort, and efficiency wages of the no-shirking type," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 0(1(6)), pages 19-33.
    10. Rogerson, Richard, 1988. "Indivisible labor, lotteries and equilibrium," Journal of Monetary Economics, Elsevier, vol. 21(1), pages 3-16, January.
    11. Alexopoulos, Michelle, 2004. "Unemployment and the business cycle," Journal of Monetary Economics, Elsevier, vol. 51(2), pages 277-298, March.
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    Cited by:

    1. Aleksandar VASILEV, 2019. "Insurance-Markets Equilibrium With A Non-Convex Labor Supply Decision, Unobservable Effort, And Efficiency Wages Of The “No-Shirking” Type," Theoretical and Practical Research in the Economic Fields, ASERS Publishing, vol. 10(1), pages 28-34.

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    More about this item

    Keywords

    Indivisible labor; Lotteries; Unobservable effort; No-shirking; Efficiency wages; Insurance;
    All these keywords.

    JEL classification:

    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts

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