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Career interruptions: a neglected aspect of a neoclassical model

Version 2 2024-06-03, 14:55
Version 1 2018-03-15, 11:52
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posted on 2024-06-03, 14:55 authored by E Gahramanov, Xueli TangXueli Tang
There is voluminous literature on the reasons behind career interruptions, ranging from maternity leave and organizational layoffs, to national service and human capital acquisition. We show that a standard, neoclassical model of intertemporal consumption/saving and labor/leisure choices without any friction can generate multiple career interruptions as a natural outcome of a consumption/leisure smoothing exercise performed by perfectly rational agents. Given the complexity of such a model, and to be consistent with traditions from the optimal control branch of mathematics, we use advances in numerical optimal control to solve a neoclassical problem.

History

Pagination

1-7

Language

eng

Notes

School working paper (Deakin University. School of Accounting, Economics and Finance) ; 2014/1 There is voluminous literature on the reasons behind career interruptions, ranging from maternity leave and organizational layoffs, to national service and human capital acquisition. We show that a standard, neoclassical model of intertemporal consumption/saving and labor/leisure choices without any friction can generate multiple career interruptions as a natural outcome of a consumption/leisure smoothing exercise performed by perfectly rational agents. Given the complexity of such a model, and to be consistent with traditions from the optimal control branch of mathematics, we use advances in numerical optimal control to solve a neoclassical problem.

Publication classification

CN.1 Other journal article

Copyright notice

2014, The Authors

Publisher

Deakin University, School of Accounting, Economics and Finance

Place of publication

Geelong, Vic.

Series

School Working Paper - Economics Series ; SWP 2014/1

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