Search in the Labor Market Under Imperfectly Insurable Income Risk

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

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Year of publication:	2009
Authors:	Roca, Mauro
Publisher:	Washington : International Monetary Fund
Subject:	Suchtheorie \| Search theory \| Unvollkommener Markt \| Incomplete market \| Arbeitslosenversicherung \| Unemployment insurance \| Allgemeines Gleichgewicht \| General equilibrium

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Extent:	Online-Ressource (72 p)
Series:	IMF Working Papers ; v.Working Paper No. 09/188 IMF working paper ; WP/09/188
Type of publication:	Book / Working Paper
Language:	English
Notes:	Description based upon print version of record 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 Insurance4. 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
ISBN:	978-1-4518-7335-1 ; 978-1-4527-3190-2 ; 978-1-4518-7335-1
Source:	ECONIS - Online Catalogue of the ZBW

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