Endogenous labour supply, habits and aspirations

Luciano Fanti

Discussion Papers from Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy

Abstract: Motivated by the increasing literature on endogenous preferences, this paper investigates the implications of the introduction of habit and aspiration formation when labour supply is endogenous, in an OLG small open economy. In contrast with models with exogenous labour supply where aspirations always reduce economic performance, we show that in a model with endogenous labour supply greater aspirations lead to a higher long run savings and economic performance, through their impact on the labour/leisure choice.

Keywords: Endogenous preferences; Fertility; OLG model. (search for similar items in EconPapers)
JEL-codes: J22 O41 (search for similar items in EconPapers)
Date: 2012-09-01
New Economics Papers: this item is included in nep-age, nep-dem, nep-dge and nep-evo
Note: ISSN 2039-1854
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Persistent link: https://EconPapers.repec.org/RePEc:pie:dsedps:2012/144

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