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 … during employment but dismissal delays insure partially against the unemployment risk because of moral hazard. During the …

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 … during employment but dismissal delays insure partially against the unemployment risk because of moral hazard. During the …

This paper studies consumption and labor supply in a model where agents have partial insurance and face risk and … consumption are solved for analytically. We prove that all parameters of the structural model are identified given panel data on … wages and hours, and cross-sectional data on consumption. The model is estimated on US data. Second moments involving hours …