Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/168354 
Year of Publication: 
2017
Publisher: 
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften, Leibniz-Informationszentrum Wirtschaft, Kiel und Hamburg
Abstract: 
This paper describes the lottery- and insurance-market equilibrium in an economy with non-convex market-sector employment and informal sector work. In contrast to Vasilev (2016a), the discrete-continuous labor supply decision in this paper is a sequential one, and instead of home production, we focus on informal activity. This still requires a single insurance market to operate - in particular, one for market-sector employment. In addition, given that the labor choice for market- and informal-sector hours is made in succession, the insurance market for market employment needs to close before the- labor supply choice in the grey economy is made. This segmentation is reminiscent of the results obtained in Vasilev (2015) and also a direct consequence of the sequential nature of the discrete-continuous sectoral labor supply decision.
Subjects: 
indivisible labor
lotteries
discrete-continuous mix
insurance
informal economy
JEL: 
J22
J46
Document Type: 
Preprint

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