Home > Publications . Search All . Browse All . Country . Browse PSC Pubs . PSC Report Series

PSC In The News

RSS Feed icon

Cheng finds marriage may not be best career option for women

Lam discusses youth population dynamics and economics in sub-Saharan Africa

Work by Bailey and Dynarski cited in NYT piece on income inequality

Highlights

Jeff Morenoff makes Reuters' Highly Cited Researchers list for 2014

Susan Murphy named Distinguished University Professor

Sarah Burgard and former PSC trainee Jennifer Ailshire win ASA award for paper

James Jackson to be appointed to NSF's National Science Board

Next Brown Bag


PSC Brown Bags will return in the fall

Consumption commitments and employment contracts

Archived Abstract of Former PSC Researcher

Postlewaite, A., L. Samuelson, and Daniel Silverman. 2008. "Consumption commitments and employment contracts." Review of Economic Studies, 75(2): 559-578.

We examine an economy in which the cost of consuming some goods can be reduced by making commitments that reduce flexibility. We show that such consumption commitments can induce consumers with risk-neutral underlying utility functions to be risk averse over small variations in income, but sometimes to seek risk over large variations. As a result, optimal employment contracts will smooth wages conditional on being employed, but may incorporate a possibility of unemployment.

DOI:10.1111/j.1467-937X.2008.00472.x (Full Text)

Country of focus: United States.

Browse | Search : All Pubs | Next