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- W4311796879 abstract "In this paper, we study the effects of two labor flexible features, a job switching opportunity and a retirement option, on the optimal strategies. We assume that the agent’s preferences are represented by a Cobb–Douglas utility function, expressed as a function of consumption and leisure. As long as the agent is working, the agent can choose one of two jobs at any time, and this choice is reversible. However, once the decision to retire is made, the agent is no longer able to work, so this decision is irreversible. We use the martingale method and study the dual problem expressed as an optimal stopping problem. By characterizing two wealth boundaries arising from the labor flexible features, we show that there is job switching during the working time and that the retirement option is exercised under the job with a higher leisure rate. We also show that the presence of the job switching opportunity makes the agent work longer with an increased retirement boundary. Based on a closed-form solution, we discuss some properties of the optimal consumption and risky investment under the proposed labor flexible model." @default.
- W4311796879 created "2022-12-28" @default.
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- W4311796879 date "2023-04-01" @default.
- W4311796879 modified "2023-09-27" @default.
- W4311796879 title "Optimal job switching and retirement decision" @default.
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- W4311796879 doi "https://doi.org/10.1016/j.amc.2022.127777" @default.
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