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Family labor supply and aggregate saving

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Santos-Monteiro, Paulo (2008) Family labor supply and aggregate saving. Working Paper. Coventry: University of Warwick, Department of Economics. Warwick economic research papers (No.875).

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Abstract

I study the impact of idiosyncratic risk on savings and employment in a small open economy populated by two-member families. Families incur a fixed cost of participation when both members are employed. Because of market incompleteness and information asymmetries, this cost coupled with labor market frictions can generate multiple equilibria. In particular, there might be one equilibrium with high employment and low saving and another one with low employment and high saving. The model predicts that aggregate saving and employment rates are negatively correlated across countries. I present empirical evidence that supports the general equilibrium prediction of the model.

Item Type:

Working or Discussion Paper (Working Paper)

Subjects:

H Social Sciences > HQ The family. Marriage. Woman
H Social Sciences > HC Economic History and Conditions

Divisions:

Faculty of Social Sciences > Economics

Library of Congress Subject Headings (LCSH):

Saving and investment, Macroeconomics, Labor supply, Information asymmetry

Series Name:

Warwick economic research papers

Publisher:

University of Warwick, Department of Economics

Place of Publication:

Coventry

Official Date:

23 October 2008

Dates:

Date	Event
23 October 2008	Published

Number:

No.875

Number of Pages:

Institution:

University of Warwick

Status:

Not Peer Reviewed

Access rights to Published version:

Open Access

Funder:

Fundação para a Ciência e a Tecnologia (FCT)

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