This paper shows that the combination of habit formation - present consumption creating additional consumption needs in the future - and myopia may explain why some retirees are forced to "unretire", i.e., unexpectedly return to work. It also shows that when myopia about habit formation leads to...

This paper proposes a model of economy with weakly non-separable preferences for both work effort and consumption. Households who derive utility from consumption of a single commodity and leisure take into account the habitual dependency of their utility on both labour supply and consumption in...

This paper shows that the combination of habit formation - present consumption creating additional consumption needs in the future - and myopia may explain why some retirees are forced to 'unretire', i.e., unexpectedly return to work. It also shows that when myopia about habit formation leads to...

We analyze Pareto-efficient tax breaks for work-related expenses in a Mirrleesian environment. Individuals are heterogenous in their ability. In addition to a labor-leisure choice, they decide how to spend their money between normal consumption and work-related goods. We derive an efficiency...