COOPERATIVE LABOR ALLOCATION UNDER UNCERTAINTY

Claudia Parliament, Yacov Tsur and David Zilberman

No 13672, Staff Papers from University of Minnesota, Department of Applied Economics

Abstract: Understanding the allocation of labor between collective and private activities within cooperatives has been an issue of interest for economists and policy makers. This paper extends existing literature by incorporating income uncertainty from both private and collective activities, and by assuming that members are risk averse. The analysis suggests a member's labor response to policy parameters can be decomposed into three components: the mean effect, reflecting the labor response under certainty or risk neutrality; the variance effect, reflecting the response to changes in risk; and the wealth effect, reflecting the response to changes in risk aversion associated with changes in wealth. The analysis demonstrates the labor response may be reversed from the certainty or risk neutral case, due to a stronger, opposing variance effect.

Keywords: Labor; and; Human; Capital (search for similar items in EconPapers)
Pages: 27
Date: 1986
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https://ageconsearch.umn.edu/record/13672/files/p86-19.pdf (application/pdf)

Related works:
Journal Article: Cooperative labor allocation under uncertainty (1989)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:umaesp:13672

DOI: 10.22004/ag.econ.13672

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