Income Inequality in a Job-Search Model with Heterogeneous Time Preferences

39 Pages Posted: 5 Feb 2014

See all articles by Rubens Penha Cysne

Rubens Penha Cysne

Getulio Vargas Foundation (FGV) - FGV/EPGE Escola Brasileira de Economia e Finanças

Date Written: March 25, 2004

Abstract

This paper explores the use of an intertemporal job-search model in the investigation of within-cohort and between-cohort income inequality, the latter being generated by the heterogeneity of time preferences among cohorts of homogenous workers and the former by the cross-sectional turnover in the job market. It also offers an alternative explanation for the empirically-documented negative correlation between time preference and labor income. Under some specific distributions regarding wage offers and time preferences, we show how the within-cohort and between-cohort Gini coefficients of income distribution can be calculated, and how they vary as a function of the parameters of the model.

Keywords: within-cohort, between-cohort, Labor, Gini coefficients

JEL Classification: E0, C0

Suggested Citation

Cysne, Rubens Penha, Income Inequality in a Job-Search Model with Heterogeneous Time Preferences (March 25, 2004). Available at SSRN: https://ssrn.com/abstract=2390734 or http://dx.doi.org/10.2139/ssrn.2390734

Rubens Penha Cysne (Contact Author)

Getulio Vargas Foundation (FGV) - FGV/EPGE Escola Brasileira de Economia e Finanças ( email )

Praia de Botafogo 190/1125, CEP
Rio de Janeiro RJ 22253-900
Brazil
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