A Model of Labor Supply, Fixed Costs and Work Schedules

Gonzalo Castex and Evgenia Detcher

Working Papers Central Bank of Chile from Central Bank of Chile

Abstract: In this paper, we examine empirically the link between sovereign bond spreads and the dispersion in We develop a three-dimensional labor supply framework that distinguishes between hours worked per day, days worked per week and workweeks. Individuals make labor supply choices given heterogeneous schedule-dependent fixed costs of work. The three margins are not perfect substitutes. Leisure on days not worked in a workweek has the largest weight in preferences, leisure on weeks o_ has the smallest weight. We use the model to analyze heterogeneous response to changes in fixed costs, schedule flexibility, and restrictions on weekly hours. Fixed costs of work affect response to each policy and determine associated losses.

Date: 2017-11
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Persistent link: https://EconPapers.repec.org/RePEc:chb:bcchwp:809

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