We study the relationship between wealth and labour market transitions. A lifecycle model, in which individuals are faced by uncertainty about the availability of jobs, serves as a basis for a reduced-form specification for the probabilities of labour market transitions, which depend on wealth...

We consider a utility-consistent static labor supply model with flexible preferences and a nonlinear and possibly non-convex budget set. Stochastic error terms are introduced to represent optimization and reporting errors, stochastic preferences, and heterogeneity in wages. Coherency conditions...