This paper analyzes the optimal response of the social insurance system to a rise in labor market risk. To this end, we … develop a tractable macroeconomic model with risk-free physical capital, risky human capital (labor market risk) and … (human capital) risk increases social welfare if the government adjusts the tax-and-transfer system optimally. Finally, we …

monitoring. Workers' stance towards monitoring is ambiguous and depends on risk aversion and the disutility of effort. Our …

An investor's choice between safe and risky assets has long been seen as a behavior toward risk: more risk … on how the attendant financial risk interacts with effort. We find that if the risk multiplies with effort, risk …-averse individuals work less, whereas under additive risk effort choice is little affected by risk preferences. Our findings complement …

arguments nor depends on ownership structure. We analyse a repeated hidden action model in which the actions of a risk neutral …

This paper investigates whether risk preferences explain how individuals are sorted into occupations with different … willingness to take risks whose behavioral relevance has been validated in previous work. As a measure of earnings risk, we use … relating earnings risk to the measure of individual risk preference, our evidence shows that individuals with low willingness …