Social security is a form of insurance that protects individuals against interruption or loss of earning power. However, in virtually every developed country, employees are leaving the labor force at younger and younger ages and such early retirement trend compounds the financial pressure on...

I study the empirical properties of a non-linear stochastic dynamic representative-agent model with rational expectations. The representative agent is assumed to have time non separable preferences. The time nonseparability in preferences is due to local substitution of consumption over time as...

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This paper develops a rational expectations life-cycle model designed as a framework for the cross-country analysis of (private) saving decisions. It is shown that a broad range of life-cycle models that have been used in the literature to study aggregate time series on consumption and saving...

In many economic situations, delegates are hired to play games for their principals. The principal-agent literature focuses on agency problems in the delegation relationships. Following Schelling (1960), the delegation literature emphasizes the commitment effects of delegation contracts against...

Parents transfer wealth to their children in many ways. The dowry is distinctive because it is a large transfer made to a daughter at the time of her marriage. In an insightful essay, Goody (1973) proposed that the dowry is a premortem inheritance to the bride. A daughter obtains a wealth...

Does market size matter for industrial structure? This paper generalises the theory on home market effects to reconcile the recent debate by allowing for an endogenous expenditure share on differentiated goods. It is shown that, in general, market size matters for industrial structure. Even when...

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This paper compares the wage of a worker performing an activity for an outside contractor with the wage that the firm contracting for this service would have paid were this worker on its payroll (i.e., working in-house). If norms of internal equity were a binding constraint, the wage paid by the...