We examine whether income and unemployment risks are compensated by individual wages. Using a portfolio approach we … show that the marginal income risk effect on wages is always positive whereas the marginal unemployment risk effect … crucially depends on the income risk. The interaction effect between both risk measures is negative. Using administrative panel …

directly on the initial income available to the worker, with a higher income reducing the effort of the worker. We also find … more effort at the optimum. -- labor ; productivity of labor ; work effort ; income ; wage ; minimum wage …