Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/144532
Authors: 
Vasilev, Aleksandar
Year of Publication: 
2015
Abstract: 
This paper 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 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.
Subjects: 
indivisible labor
public employment
insurance
lotteries
JEL: 
H31
J21
Document Type: 
Preprint

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