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Income Distribution Dynamics, Indivisible Labor and Policy Implications

초록/요약 도움말

This paper investigates the cyclical behavior of the income distribution over business cycles as well as policy implications for the income share dynamics of individuals in the lowest income group using a heterogeneous agent model. The main …findings are (i) the heterogeneous agent model with an indivisible labor supply plays an important role in explaining the steady state distributions of wealth, earnings and income, (ii) the indivisible labor supply performs much better for the cyclical behavior of the income distribution than the divisible labor model, and (iii) the unemployment compensation plays an important role in stabilizing the income share for the lowest income group.

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