Read Unemployment and Insurance

Unemployment and Insurance

Sherwin Rosen

4.9/5 (25656 ratings)

Description:This paper elaborates equilibrium properties of contract labor markets when cost barriers limit labor mobility in response to demand and productivity shifts. Unemployment is sustained because the marginal value of labor is not equated across all firms; however the equilibrium contract optimally allocates a worker's time between market and nonmarket uses, given transactions cost-mobility constraints. Contracts provide full unemployment insurance for risks that are diversifiable by pooling among firms. Nondiversifiable (macro) risks are only partially shifted,largely through self-insurance (contingency saving). Increasing diversifiable risk has social value, similar to the value of an option. Increasing nondiversifiable risk has negative value because it reduces lifetime consumption. The main empirical implication of contract theory is shown to be closely related to the permanent income hypothesis and establishes linkages between labor activities and consumption behavior. It is atheory of consumption rigidity rather than wage rigidity. Another empirical implication is that unemployment incidence is proportional to comparative advantage in normarket production. Layoffs are ordered by workers' relative productivity in nonmarket compared with market sectors. The theory is used to analyze some features of the U.S. employment system. Its empirical support is briefly reviewed.We have made it easy for you to find a PDF Ebooks without any digging. And by having access to our ebooks online or by storing it on your computer, you have convenient answers with Unemployment and Insurance. To get started finding Unemployment and Insurance, you are right to find our website which has a comprehensive collection of manuals listed.
Our library is the biggest of these that have literally hundreds of thousands of different products represented.

Pages: 88

Format: PDF, EPUB & Kindle Edition

Publisher: —

Release: 1983

ISBN: UFJuAAAAMAAJ

Description: This paper elaborates equilibrium properties of contract labor markets when cost barriers limit labor mobility in response to demand and productivity shifts. Unemployment is sustained because the marginal value of labor is not equated across all firms; however the equilibrium contract optimally allocates a worker's time between market and nonmarket uses, given transactions cost-mobility constraints. Contracts provide full unemployment insurance for risks that are diversifiable by pooling among firms. Nondiversifiable (macro) risks are only partially shifted,largely through self-insurance (contingency saving). Increasing diversifiable risk has social value, similar to the value of an option. Increasing nondiversifiable risk has negative value because it reduces lifetime consumption. The main empirical implication of contract theory is shown to be closely related to the permanent income hypothesis and establishes linkages between labor activities and consumption behavior. It is atheory of consumption rigidity rather than wage rigidity. Another empirical implication is that unemployment incidence is proportional to comparative advantage in normarket production. Layoffs are ordered by workers' relative productivity in nonmarket compared with market sectors. The theory is used to analyze some features of the U.S. employment system. Its empirical support is briefly reviewed.We have made it easy for you to find a PDF Ebooks without any digging. And by having access to our ebooks online or by storing it on your computer, you have convenient answers with Unemployment and Insurance. To get started finding Unemployment and Insurance, you are right to find our website which has a comprehensive collection of manuals listed.
Our library is the biggest of these that have literally hundreds of thousands of different products represented.

Special Offer | $0.00

Special Offer! | $0.00

Unemployment and Insurance

Unemployment and Insurance

More Books

Markets and Diversity

Markets and Diversity

Studies in Labor Markets (National Bureau of Economic Research Universities-National Bureau Conference Series Book 31)

Studies in Labor Markets (National Bureau of Economic Research Universities-National Bureau Conference Series Book 31)

Variability in Employment, Prices, and Money (Carnegie-Rochester Conference Series on Public Policy, Volume 19)

Variability in Employment, Prices, and Money (Carnegie-Rochester Conference Series on Public Policy, Volume 19)

Unemployment and insurance (Working paper / National Bureau of Economic Research)

Unemployment and insurance (Working paper / National Bureau of Economic Research)

Prizes and incentives in elimination tournaments (Working paper / National Bureau of Economic Research)

Prizes and incentives in elimination tournaments (Working paper / National Bureau of Economic Research)

Potato paradoxes (Working paper)

Potato paradoxes (Working paper)

Ticket pricing (Working paper series)

Ticket pricing (Working paper series)

The American Economic Review, Articles Shorter Papers Papers & Proceedings, may 2001, Volume 91, Number 2,also Includes volume 89, number 1 volume 91 number 1

The American Economic Review, Articles Shorter Papers Papers & Proceedings, may 2001, Volume 91, Number 2,also Includes volume 89, number 1 volume 91 number 1

Distribution of prizes in a match-play tournament with single eliminations (NBER working paper series)

Distribution of prizes in a match-play tournament with single eliminations (NBER working paper series)