Working Time and Employment under Uncertainty
University of Dundee - Department of Economic Studies
University of Hamburg - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)
CESifo Working Paper Series No. 732
The standard literature on working time has modeled the decisions of firms in a deterministic framework in which firms can choose between employment and overtime (given mandated standard hours). Contrary to this approach, we consider the impact of uncertainty and real options on the decision of working time, i.e. we examine the determinants of employment and hours in a stochastic framework. We conclude the theoretical analysis with a number of simulation exercises to illustrate the working of the model.
Number of Pages in PDF File: 28
Keywords: Real Options, Uncertainty, Working Time, Employment, Labor Demand
JEL Classification: D81, E24, J23
Date posted: September 11, 2002
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