Kolm, Ann-Sofie (contributor); … - 2005
exception that the term E−U becomes
E−U =
1
r+s+λ
(w
o
(1−t)+w
e
(1−pδ)−C (w
e
)−B). Hence, (8) still pins
down the size of …,orδ, raises unemployment.
11
Proof Differentiating (10) yields ∂θ/∂x
1
< 0, and ∂θ/∂x
2
> 0, x
1
=
p,α,δ,x
2
= t,z. Differentiating … (1) yields ∂u/∂x
1
> 0, and ∂u/∂x
2
< 0,
x
1
= p,α,δ,x
2
= t,z.
We thus find, perhaps contrary to expectations, that …
