CEU Electronic Theses and Dissertations, 2018
| Author | Máté, Áron Imre |
|---|---|
| Title | The Effect of Secured Employment on the Precautionary Motive |
| Summary | The thesis aims to introduce a method for implementing endogenous employment choice in an intertemporal utility maximization macroeconomic setting. In the model the main source of agents’ heterogeneity is the lack of enough wealth to safely choose a highwage employment. Instead, individuals with low assets choose a riskless job until they can accumulate enough savings to switch to higher paying opportunity. Agents follow a pre-cautionary motive to evade the above-mentioned cycle and to mitigate the individual idiosyncratic risk that they face from working. This general equilibrium setup is analyzed in a Huggett economy (1993) where I produce a stationary equilibrium of savings distribution and interest rate. Compared to a benchmark model the inequality is relatively higher since the bottom ten percent of the agents have half of the assets. This resembles the empirical data as well. |
| Supervisor | Briglevics, Tamás |
| Department | Economics MA |
| Full text | https://www.etd.ceu.edu/2018/mate_aron.pdf |
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