On the Theory of Labor Supply with Wage Rate Uncertainty
- 서울대학교 경제연구소
- Seoul Journal of Economics
- Seoul Journal of Economics Volume 12 No.3
-
1999.09227 - 238 (11 pages)
- 3
Kim (1994) uses the uncertainty counterpart of price compensations to decompose the effect of increased wage uncertainty on labor supply into income and substitution terms. This paper complements Kim's work by formulating the uncertainty counterpart of income compensations commonly used in economic theory. Substitution and income effects based on income compensations are derived and compared to those derived by Kim. Necessary and sufficient conditions on preferences to sign these effects are also provided.
Abstract
Ⅰ. Introduction
Ⅱ. Kim's Wage-Compensated Income and Substitution Effects
Ⅲ. Income-Compensated Income and Substitution Effects
Ⅳ. Incremental-Risk Premium and the Sign of the Income-Compensated Substitution Effect
Ⅴ. Comparison of Wage-and Income-Compensated Income and Substitution Effects
Ⅵ. The Geometry
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