Michelacci, Claudio (contributor); … - 2007
key testable implication of the model is that current hours of work raise future income.
Another is that their effects on … following equation:
lnwi,t = ψ0 +ϕ1 lnwi,t−1 +ϕ2 lnhi,t +ϕ3 lnhi,t−1 +εi,t (8)
Hours of work increase future income ifϕ1ϕ2+ϕ3 … positive correlation between hours of work and income inequality.
Our theory provides a causal interpretation for their …