Aggregation with a double non-convex labor supply decision: indivisible private- and public-sector hours

Aleksandar Vasilev

Ekonomia journal, 2016, vol. 47

Abstract: This paper explores the problem of non-convex labor supply decisions in an economy with both private and public sector jobs. To this end, Hansen (1985) and Rogerson’s (1988) indivisible-hours framework is extended to an environment featuring a double discrete labor choice. The novelty of the study is that the micro-founded representation obtained from explicit aggregation over homogeneous individuals features different disutility of labor across the two sectors, which is in line with the observed difference in average wage rates (OECD 2011). Therefore, this theory-based utility function could be utilized to study labor supply responses over the business cycle.

Keywords: indivisible labor; public employment; aggregation; elasticity of labor supply (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Aggregation with a double non-convex labor supply decision: indivisible private- and public-sector hours (2016)
Working Paper: Aggregation with a double non-convex labor supply decision: indivisible private- and public-sector hours (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:eko:ekoeko:47_123

DOI: 10.17451/eko/47/2016/233

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