This paper derives optimal employment contracts when workers are risk averse and there are employment and unemployment risks. Without income insurance, consumption rises during employment and falls during unemployment. Optimal employment contracts offer severance compensation and sometimes give...

Based on a model with imperfectly competitive labor and product markets the real consequences of labor market shocks for economies with either an earnings-related or flatrate unemployment compensation system are considered. A distinctive feature of the analysis is the comparison of both...

This paper implements a simple Bayesian approach to quantitatively study the Hansen and Imrohoroglu (1992) economy, a calibrated GE model with uninsurable employment risk, designed to assess the optimal replacement rate for a public Unemployment Insurance scheme. The results of this sensitivity...

This paper implements a simple Bayesian approach to quantitatively study the Hansen and Imrohoroglu (1992) economy, a calibrated GE model with uninsurable employment risk, designed to assess the optimal replacement rate for a public Unemployment Insurance scheme. The results of this sensitivity...

The present dissertation aims at contributing to the understanding of central labor market mechanisms by analyzing open questions on the determinants of firms' labor demand, unemployed individuals' job search behavior and the state's role in shaping peoples' trust and, thereby, affecting labor...