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We decompose permanent earnings risk into contributions from hours and wage shocks. To distinguish between hours shocks, modeled as innovations to the marginal disutility of work, and labor supply reactions to wage shocks we formulate a life-cycle model of consumption and labor supply. Both...
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We decompose permanent earnings risk into contributions from hours and wage shocks. To distinguish between hours shocks, modeled as innovations to the marginal disutility of work, and labor supply reactions to wage shocks we formulate a life-cycle model of consumption and labor supply. Both...
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Utility theory suggests that foreseeable risk should increase the compensation for work. This paper expands on this … notion: on basis of utility theory, people should care not only about risk but also about the skewness in the distribution of … finds supportive evidence: wages rise with occupational earnings variance and decrease with skewness. In order to identify …
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