S-Space College of Social Sciences (사회과학대학) Institute of Economics Research (경제연구소) Seoul Journal of Economics (SJE) Seoul Journal of Economics vol.12(3) (Fall 1999)
On the Theory of Labor Supply with Wage Rate Uncertainty
- Issue Date
- Seoul Journal of Economics, Vol.12 No.3, pp. 227-238
- Kim (1994) uses the uncertainty counterpart of price compensations to decompose the effect of increased wage uncertainty on labor supply into income and substitution terms. This paper complements Kim's work by formulating the uncertainty counterpart of income compensations commonly used in economic theory. Substitution and income effects based on income compensations are derived and compared to those derived by Kim. Necessary and sufficient conditions on preferences to sign these effects are also provided.