Labor Supply in Pandemics Environments: An Aggregative Games Approach

Luciana Fiorini and Wilfredo Maldonado ()

No 2022_18, Working Papers, Department of Economics from University of São Paulo (FEA-USP)

Abstract: We analyze the effects that pandemic processes have on labor supply decisions using an aggregative game framework. The individual payoff depends on her labor supply and on the probability of being infected, which in turn, depends on the aggregate labor supply. We show the effects of social and sanitary public policies on the Nash equilibrium and analyze its expectational stability. The results indicate that compensating policies and sanitary policies can attenuate the damaging effect of pandemic and stabilize expectations regarding the aggregate decision of labor supply. We also find a set of parameters where two-period cycles for the expectations revision map may arise, implying the oscillating behavior of the probability of contagion in this class of models.

Keywords: Labor supply; pandemic; aggregative games (search for similar items in EconPapers)
JEL-codes: C72 J28 J38 (search for similar items in EconPapers)
Date: 2022-08-02
New Economics Papers: this item is included in nep-gth
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Citations: View citations in EconPapers (1)

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Working Paper: Labor Supply in Pandemic Environments: An Aggregative Games Approach (2022)
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