Occupational choice, incentives and wealth distribution

• 成果类型: Article
• 署名作者: Chakraborty, A; Citanna, A
• 署名单位: City University of New York (CUNY) System; Baruch College (CUNY)
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2003.11.004
• 发表日期: 2005
• 页码: 206-224
• 关键词: Matching; moral hazard; wealth distribution

摘要

We consider a model of occupational choice in large economies where individuals differ in their wealth endowment. Individuals can remain self-employed or engage in productive matches with another individual, i.e., form firms. Matches are subject to a moral hazard problem with limited liability. The division of the gains from such matches is determined by competitive forces. When the incentive problem is asymmetric, matches are typically wealth-heterogeneous, with richer individuals choosing the occupation for which incentives are more important. The utilities attained within a match depend on the wealth distribution and changes in the latter give rise to 'trickle down' effects. (c) 2003 Elsevier Inc. All rights reserved.