Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/145298
Authors: 
Vasilev, Aleksandar
Year of Publication: 
2016
Abstract: 
This note describes the lottery- and insurance-market equilibrium in an economy with non-convex straight-time and overtime employment. In contrast to Hansen and Sargent (1988), the overtime-decision is a sequential one. This requires two separate insurance market to operate, one for straight-time work, and one for overtime. In addi- tion, given that the labor choice for regular and overtime hours is made in succession, the insurance market for overtime needs to open once the insurance market has closed. This segmentation and sequentiality of insurance markets operation is a new result in the literature and a direct consequence of the sequential nature of the overtime labor decision.
Subjects: 
indivisible labor
straight-time
overtime
sequential lotteries
insurance
JEL: 
E1
J2
Document Type: 
Preprint

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