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 … during employment but dismissal delays insure partially against the unemployment risk because of moral hazard. During the …

Minimum wages alter the allocation of firm-idiosyncratic risk across workers. To establish this result, we focus on …

attractive, and hence decrease the amount of risk sharing sustainable within the firm. Evidence on average displacement costs by …

We evaluate the allocation of risk between firms and their workers using matched employer-employee panel data. Unlike … the theoretical notion of diversifiable risk. We allow for both temporary and permanent shocks to output and find that … firms absorb temporary fluctuations fully but insure workers against permanent shocks only partially. Risk …