Strong hysteresis in the labour market (see Cross, 1995) requires workers to be heterogeneous in terms of the cost of hiring and firing. We show how such heterogeneity arises naturally in labour markets due to differences in workers’ age by showing that both the hiring and the firing...

It has been observed that university professors sometimes become less research active in their mature years. This paper models the decision to become inactive as a utility maximising problem under conditions of uncertainty and derives an age-dependent inactivity condition for the level of...

It has been observed that university professors sometimes become less research active in their mature years. This paper models the decision to become inactive as a utility maximising problem under conditions of uncertainty and derives an age-dependent inactivity condition for the level of...