Report
A note on labor contracts with private information and household production
Abstract: A classic result in the theory of implicit contract models with asymmetric information is that ?underemployment? results if and only if leisure is an inferior good. We introduce household production into the standard implicit contract model and show that we can have underemployment at the same time that leisure is a normal good.
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Bibliographic Information
Provider: Federal Reserve Bank of Minneapolis
Part of Series: Staff Report
Publication Date: 1991
Number: 131