Munich Personal RePEc Archive

Involuntary unemployment under indivisible labor supply: Perfect competition case

Tanaka, Yasuhito (2019): Involuntary unemployment under indivisible labor supply: Perfect competition case.

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Abstract

We show the existence of involuntary unemployment without assuming wage rigidity. A key point of our analysis is indivisibility of labor supply. We derive involuntary unemployment by considering utility maximization of consumers and marginal cost pricing behavior of firms in an overlapping generations model under perfect competition with indivisibility of labor supply and decreasing or constant returns to scale technology

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