MENDOLICCHIO, CONCETTA; PAOLINI, DIMITRI; PIETRA, TITO - In: Journal of Public Economic Theory 16 (2014) 1, pp. 24-47
We study a two-sector economy with investments in human and physical capital and imperfect labor markets. Investments are irreversible and noncontractible, due to random matching between firms and workers. Income is allocated according to the Nash bargaining mechanism. At equilibrium, given the...