We study optimal job switching and consumption/investment policies of an economic agent under the borrowing constraints against future labor income in a continuous and infinite time horizon. The agent’s preference is given by the Cobb–Douglas utility function whose arguments are consumption and leisure, and the jobs are characterized by the trade-off between labor income and leisure. We obtain a closed-form solution to the optimization problem by using the martingale and duality method, and investigate theoretical implications of it. The most interesting finding for the optimal job switching policy is that the borrowing constraints in the financial market can decrease the effective flexibility in labor supply of the agent in the labor market. Thus, an environment of the financial market can affect an agent’s decision making in the labor market. We also show how the effects of the borrowing constraints on the optimal consumption/investment policy reinforce or compete with those of the job switching opportunities.

中文翻译：

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借款约束，劳动力供应的有效灵活性和投资组合选择

我们研究了在连续和无限的时间范围内，借贷限制未来劳动力收入的情况下，经济主体的最佳工作转换和消费/投资政策。代理人的偏好由Cobb–Douglas效用函数给出，该函数的参数为​​消费和休闲，而工作的特征是劳动收入与休闲之间的权衡。我们使用ting和对偶方法获得了优化问题的闭式解，并研究了其理论含义。最佳工作转换策略最有趣的发现是，金融市场中的借贷限制会降低劳动力市场中代理商的劳动力供给的有效灵活性。因此，金融市场的环境会影响代理在劳动力市场上的决策。