01736cas a2200241 a 4500 AALejournalIMF006026 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451873351 1018-5941 BD-DhAAL BD-DhAAL Roca, Mauro. Search in the Labor Market under Imperfectly Insurable Income Risk / Mauro Roca. Washington, D.C. : International Monetary Fund, 2009. 1 online resource (37 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper develops a general equilibrium model with unemployment and noncooperative wage determination to analyze the importance of incomplete markets when risk-averse agents are subject to idiosyncratic employment shocks. A version of the model calibrated to the U.S. shows that market incompleteness affects individual behavior and aggregate conditions: it reduces wages and unemployment but increases vacancies. Additionally, the model explains the average level of unemployment insurance observed in the U.S. A key mechanism is the joint influence of imperfect insurance and risk aversion in the wage bargaining. The paper also proposes a novel solution to solve this heterogeneous-agent model. Mode of access: Internet IMF Working Papers; Working Paper ; No. 2009/188 Full text available on IMF http://elibrary.imf.org/view/journals/001/2009/188/001.2009.issue-188-en.xml IMF e-Library