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Search in the Labor Market under Imperfectly Insurable Income Risk / Mauro Roca.
- Format:
- Book
- Government document
- Author/Creator:
- Roca, Mauro.
- Series:
- IMF Working Papers; Working Paper ; No. 2009/188
- IMF Working Papers
- Language:
- English
- Subjects (All):
- Unemployment.
- Labor market.
- Unemployment insurance.
- Physical Description:
- 38 p.
- Edition:
- 1st ed.
- Place of Publication:
- Washington, D.C. : International Monetary Fund, 2009.
- Language Note:
- English
- Summary:
- This paper develops a general equilibrium model with unemployment and noncooperative wage determination to analyze the importance of incomplete markets when risk-averse agents are subject to idiosyncratic employment shocks. A version of the model calibrated to the U.S. shows that market incompleteness affects individual behavior and aggregate conditions: it reduces wages and unemployment but increases vacancies. Additionally, the model explains the average level of unemployment insurance observed in the U.S. A key mechanism is the joint influence of imperfect insurance and risk aversion in the wage bargaining. The paper also proposes a novel solution to solve this heterogeneous-agent model.
- Contents:
- Cover Page
- Title Page
- Copyright Page
- Contents
- I. Introduction
- II. The Model
- A. Labor Market
- B. Consumers
- C. Firms
- 1. Wage determination
- D. Government
- E. Stationary Equilibrium
- III. Solution method
- A. Fast-turnover limit
- B. Approximation
- 1. Steady state
- 2. Approximation around steady state
- IV. Quantitative analysis
- A. Calibration
- B. The effects of idiosyncratic risk
- 1. Effects of Idiosyncratic Risk on the Labor Market
- 1. Approximation to Consumption Functions
- 2. Effects of Idiosyncratic Risk on Consumption and Capital
- C. Optimal replacement rate
- 2. Variations in Welfare
- 3. Effects of Unemployment Insurance
- 4. Effects of Idiosyncratic Risk
- V. Conclusions
- I. Derivation of the solution to the wage bargaining
- II. Fast-turnover limit
- A. Derivation of the Euler condition
- B. Derivation of the wage equation
- III. Approximation around the steady state
- A. Response to individual asset holdings
- B. Response to the length of the time interval Δ
- References
- Footnotes.
- Notes:
- "September 2009."
- Description based on print version record.
- ISBN:
- 9786612843983
- 9781462358793
- 1462358799
- 9781452731902
- 145273190X
- 9781282843981
- 1282843982
- 9781451873351
- 1451873352
- OCLC:
- 449931755
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