The effects of risk on efficient labor contracts

Noel Gaston and Randall Wright
Additional contact information
Noel Gaston: Tulane University

Finnish Economic Papers, 1991, vol. 4, issue 1, 2-9

Abstract: We analyze the effects of productivity risk on the expected utility of workers under efficient labor contracts. With multiplicative uncertainty in productivity, an increase in risk increases workers' expected utility, holding expected profit constant, as has been shown by Rosen. With a technology that is concave in both labor and the productivity shock, however, the opposite is true. We also study the effects of risk on wages, employment and hours, and characterize the dependence of these effects on the curvature of the marginai productivity schedule.

Date: 1991
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://taloustieteellinenyhdistys.fi/images/stories/fep/f1991_1a.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fep:journl:v:4:y:1991:i:1:p:2-9

Access Statistics for this article

More articles in Finnish Economic Papers from Finnish Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Editorial Secretary ( this e-mail address is bad, please contact ).