TY  - JOUR
AB  - Purpose The purpose of this paper is to explore the problem of non-convex labor supply decision in an economy with both discrete and continuous labor decisions. In contrast to the setup in McGrattan et al. (1997), here each household faces an indivisible labor supply choice in the market sector, while it can choose to work any number of hours in the non-market sector.Design/methodology/approach The authors show how lotteries as in Rogerson (1988) can again be used to convexify consumption sets, and aggregation over individual preferences.Findings With a mix of discrete and continuous labor supply decisions, disutility of non-market work becomes separable from market work, and the elasticity of the latter increases from unity to infinity.Research limitations/implications As a possible venue for future research, the authors plan to feed the derived aggregate utility function above in a sophisticated real-business-cycle model to investigate the effect of those preferences for the transmission of technology and fiscal shocks.Originality/value This is a novel and interesting result in the aggregation literature.
VL  - 43
IS  - 12
SN  - 0306-8293
DO  - 10.1108/IJSE-04-2015-0098
UR  - https://doi.org/10.1108/IJSE-04-2015-0098
AU  - Vasilev Aleksandar
PY  - 2016
Y1  - 2016/01/01
TI  - Aggregation with a mix of indivisible and continuous labor supply decisions: The case of home production
T2  - International Journal of Social Economics
PB  - Emerald Group Publishing Limited
SP  - 1507
EP  - 1512
Y2  - 2024/05/10
ER  -