Working Time and Employment Under Uncertainty

28 Pages Posted: 11 Sep 2002

See all articles by Yu-Fu Chen

Yu-Fu Chen

University of Dundee - Department of Economic Studies

Michael Funke

University of Hamburg - Department of Economics; Tallinn University of Technology (TUT)

Date Written: May 2002

Abstract

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.

Keywords: Real Options, Uncertainty, Working Time, Employment, Labor Demand

JEL Classification: D81, E24, J23

Suggested Citation

Chen, Yu-Fu and Funke, Michael, Working Time and Employment Under Uncertainty (May 2002). Available at SSRN: https://ssrn.com/abstract=318350 or http://dx.doi.org/10.2139/ssrn.318350

Yu-Fu Chen

University of Dundee - Department of Economic Studies ( email )

Dundee DD1 4HN, Scotland
United Kingdom
+44 1382 344 383 (Phone)
+44 1382 344 691 (Fax)

Michael Funke (Contact Author)

University of Hamburg - Department of Economics ( email )

Von-Melle-Park 5
room 2128 C rise
Hamburg, 20146
Germany

Tallinn University of Technology (TUT) ( email )

Ehitajate tee 5
Tallinn, 12618
Estonia

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