Incentives and Transitions in the Labor Market : An Analysis of the Strategies of Accepting or Refusing Employment
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2002
- ISIDORE Id: 10670/1.26cef7...
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Working conditions Earnings Wage rates Wage-fund Departmental salaries Remuneration Pay Salaries Compensation Working class--WagesCiter ce document
Thierry Laurent et al., « Incentives and Transitions in the Labor Market : An Analysis of the Strategies of Accepting or Refusing Employment », Revue économique, ID : 10670/1.26cef7...
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This paper proposes an intertemporal and consistent framework in order to measure the incentives for returning to employment. A job seeker accepts a job which maximizes the sum of his discounted expected incomes, taking into account earnings associated with every job, worker’s mobility between jobs and his rate of preference for the present. In this framework, we show that work can pay, even if it does not pay immediately. Inversely, high immediate gain can be compensated by unfavorable perspectives. These theoretical results − illustrated by numerical simulations − show that monetary gain upon return to employment is neither a necessary nor a sufficient condition to explain the existence of a low level of labor force participation originated in incentive problems. Classification JEL: H31, H53, I38, J22, J64
