Indivisible labor, lotteries and equilibrium

Richard Rogerson

doi:10.1016/0304-3932(88)90042-6

Indivisible labor, lotteries and equilibrium

Richard Rogerson

Research output: Contribution to journal › Article › peer-review

544 Scopus citations

Abstract

This paper considers an economy where labor is indivisible and agents are identical. Although the discontinuity in labor supply at the individual level disappears as a result of aggregation, it is shown that indivisible labor has strong consequences for the aggregate bahavior of the economy. It is also shown that optimal allocations involve lotteries over employment and consumption.

Original language	English (US)
Pages (from-to)	3-16
Number of pages	14
Journal	Journal of Monetary Economics
Volume	21
Issue number	1
DOIs	https://doi.org/10.1016/0304-3932(88)90042-6
State	Published - Jan 1988
Externally published	Yes

All Science Journal Classification (ASJC) codes

Finance
Economics and Econometrics

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10.1016/0304-3932(88)90042-6

Cite this

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title = "Indivisible labor, lotteries and equilibrium",

abstract = "This paper considers an economy where labor is indivisible and agents are identical. Although the discontinuity in labor supply at the individual level disappears as a result of aggregation, it is shown that indivisible labor has strong consequences for the aggregate bahavior of the economy. It is also shown that optimal allocations involve lotteries over employment and consumption.",

author = "Richard Rogerson",

note = "Funding Information: *I am indebted to Ed Prescott for his guidance. I ha~,e benefited from conversatio~ with John Geaneakoplos. Vittorio Grilii, Rol:ert King, Glenn MacDonald, Rodolfo Manuelli, Walter Oi, and the comments of an anonymous referee. Financial support from the Social Sciences and Humanities Research Council of Canada and NSF Grant No. S~S-85!0861 is gratefully acknowledged.",

year = "1988",

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N2 - This paper considers an economy where labor is indivisible and agents are identical. Although the discontinuity in labor supply at the individual level disappears as a result of aggregation, it is shown that indivisible labor has strong consequences for the aggregate bahavior of the economy. It is also shown that optimal allocations involve lotteries over employment and consumption.

AB - This paper considers an economy where labor is indivisible and agents are identical. Although the discontinuity in labor supply at the individual level disappears as a result of aggregation, it is shown that indivisible labor has strong consequences for the aggregate bahavior of the economy. It is also shown that optimal allocations involve lotteries over employment and consumption.

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Indivisible labor, lotteries and equilibrium

Abstract

All Science Journal Classification (ASJC) codes

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