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.
Series
School Working Paper - Economics Series ; SWP 2014/1Pagination
1 - 7Publisher
Deakin University, School of Accounting, Economics and FinancePlace of publication
Geelong, Vic.Language
engNotes
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 articleCopyright notice
2014, The Authors
