28 Pages Posted: 11 Sep 2002
Date Written: May 2002
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: Suggested Citation
Chen, Yu-Fu and Funke, Michael, Working Time and Employment under Uncertainty (May 2002). CESifo Working Paper Series No. 732. Available at SSRN: https://ssrn.com/abstract=318350