Involuntary unemployment under indivisible labor supply: Perfect competition case

Yasuhito Tanaka

MPRA Paper from University Library of Munich, Germany

Abstract: We show the existence of involuntary unemployment without assuming wage rigidity. A key point of our analysis is indivisibility of labor supply. We derive involuntary unemployment by considering utility maximization of consumers and marginal cost pricing behavior of firms in an overlapping generations model under perfect competition with indivisibility of labor supply and decreasing or constant returns to scale technology

Keywords: involuntary unemployment; indivisible labor supply; perfect competition (search for similar items in EconPapers)
JEL-codes: E12 E24 (search for similar items in EconPapers)
Date: 2019-12-25
New Economics Papers: this item is included in nep-mac and nep-ore
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