Insurance-Markets Equilibrium with Double Indivisible Labor Supply

Aleksandar Vasilev

Czech Economic Review, 2015, vol. 9, issue 2, 091-103

Abstract: This note describes the lottery- and insurance-market equilibrium in an economy with both private and public sector employment and non-convex labor supply. In addition, when households are constrained to search for jobs only in a certain sector, the framework requires that there should be separate insurance markets: a public and a private sector one, which would pool the unemployment risk of the corresponding group of households. The unemployment insurance market segmentation is a new result in the literature and a direct consequence of the non-convexity of the labor supply in each sector and the sorting effect of the sector-type shock introduced in the model setup.

Keywords: Indivisible labor; public employment; insurance (search for similar items in EconPapers)
JEL-codes: H31 J21 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (4)

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