Consumption and savings with unemployment risk
Subtitle: implications for optimal employment contracts
By: by Christopher A. Pissarides.
Series: Discussion paper ;; no. 1183; Discussion paper (Forschungsinstitut zur Zukunft der Arbeit : Online) ;; no. 1183
Publisher: IZA
Published: 2004
Place of publication: Bonn, Germany
Language: eng
Format: Electronic resource
Description: "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 contracts offer severance compensation and sometimes give notice before dismissal. Severance compensation smoothes consumption during employment but dismissal delays insure partially against the unemployment risk because of moral hazard. During the delay consumption falls to give incentives to the worker to search for another job. No dismissal delays are optimal if exogenous unemployment compensation is sufficiently generous"--Forschungsinstitut zur Zukunft der Arbeit web site.
Notes: Also available in print.
Includes bibliographical references.
Title from PDF file as viewed on 5/16/2005.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.