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Insurance-markets Equilibrium with Sequential Non-convex Market-Sector- and Divisible Informal-Sector Labor Supply

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  • Vasilev, Aleksandar

Abstract

This paper describes the lottery- and insurance-market equilibrium in an economy with non-convex market-sector employment and informal sector work. In contrast to Vasilev (2016a), the discrete-continuous labor supply decision in this paper is a sequential one, and instead of home production, we focus on informal activity. The presence of non- convexity requires that an insurance market for market-sector employment be put in operation to achieve market completeness. In addition, given that the labor choice for market work and informal-sector hours is made in succession, the insurance market for market employment needs to close before the labor supply choice in the grey economy is made. This timing is reminiscent of the results obtained in Vasilev (2016b) and also a direct consequence of the sequential nature of the discrete-continuous sectoral labor supply decision.

Suggested Citation

  • Vasilev, Aleksandar, 2018. "Insurance-markets Equilibrium with Sequential Non-convex Market-Sector- and Divisible Informal-Sector Labor Supply," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 3(2(5)), pages 19-32.
    • Handle: RePEc:zbw:espost:172329
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    References listed on IDEAS

    as
    1. Aleksandar VASILEV, 2017. "Aggregation With Sequential Indivisible And Continuous Labor Supply Decisions And An Informal Sector," Theoretical and Practical Research in the Economic Fields, ASERS Publishing, vol. 8(2), pages 144-148.
    2. Vasilev, Aleksandar, 2017. "Insurance-markets Equilibrium with Sequential Non-convex Private- and Public-Sector Labor Supply," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 2(2), pages 19-34.
    3. Aleksandar Vasilev, 2015. "Insurance-Markets Equilibrium with Double Indivisible Labor Supply," Czech Economic Review, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, vol. 9(2), pages 091-103, December.
    4. Vasilev, Aleksandar, 2016. "Aggregation with a mix of indivisible and continuous labor supply decisions: the case of home production," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 43(12), pages 1507-1512.
    Full references (including those not matched with items on IDEAS)

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    4. Vasilev, Aleksandar, 2017. "Insurance-markets Equilibrium with Sequential Non-convex Private- and Public-Sector Labor Supply," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 2(2), pages 19-34.
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    More about this item

    Keywords

    Indivisible labor; lotteries; discrete-continuous mix; informal economy; insurance;
    All these keywords.

    JEL classification:

    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J46 - Labor and Demographic Economics - - Particular Labor Markets - - - Informal Labor Market

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