Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/224916
Authors: 
Vasilev, Aleksandar
Year of Publication: 
2020
Citation: 
[Journal:] Theoretical and Practical Research in Economic Fields [ISSN:] 2068-7710 [Issue:] forthcoming [Pages:] 1-6
Abstract: 
The purpose of this paper is to explore the problem of non-convex labor supply decision in an economy where households feature consumption habits. We show how lotteries as in Rogerson (1988) can again be used to convexify consumption sets, and aggregate over individual preferences. The presence of habits in consumption does not affect the results. As in Hansen (1985) and Rogerson (1988) and no consumption habits, with a discrete labor supply decision at individual level, the elasticity of hours worked at the aggregate level increases from unity to infinity.
Subjects: 
Aggregation
Indivisible Labor
Consumption Habits
Non-convexities
JEL: 
E1
J22
J46
Document Type: 
Article
Document Version: 
Accepted Manuscript (Postprint)

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