Straight-time and overtime : a sequential-lottery approach

Aleksandar Vasilev

This note explores the problem of aggregation with non-convex labor supply decisions in an economy with both straight time and overtime. In contrast to Hansen and Sargent (1988), the paper models this as a sequential decision. Instead of changing from one to infinity, with a sequential non-convexity, the aggregate elasticity of labor supply for overtime work is a function of overall participation rate, and the aggregate elasticity of labor supply for full-time work depends on the share of workers doing overtime.

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Year of publication:	June 7, 2016
Authors:	Vasilev, Aleksandar
Publisher:	[Kiel : ZBW
Subject:	straight time \| overtime \| indivisible labor \| sequential lottery \| Überbeschäftigung \| Overemployment \| Glücksspiel \| Gambling \| Theorie \| Theory \| Unteilbare Güter \| Indivisible goods