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Time Preferences and Job Search: Evidence from France

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Author Info

  • Bassem Ben Halima

    (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - Ecole Normale Supérieure Lettres et Sciences Humaines)

  • Mohamed Ben Halima

    ()
    (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - Ecole Normale Supérieure Lettres et Sciences Humaines)

Abstract

Increasing impatience reduces search efforts of unemployed job seekers and therefore decreases the exit rate from unemployment. Also, impatience reduces reservation wage and increases the exit rate. To determine the overall effect of impatience on the exit rate from unemployment, we distinguish between exponential and hyperbolic time preferences. Search effort dominates the reservation wage and decreases the exit rate from unemployment if individuals have hyperbolic, rather than exponential, preferences. Using the French sample of the European Household Panel Survey, we found that search effort has a strong effect on the duration of unemployment, whereas the reservation wage is not significant. This result shows that the job seekers have hyperbolic preferences. Hyperbolic preferences affect problems associated with job search and policies aimed at reducing unemployment.

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Bibliographic Info

Paper provided by HAL in its series Post-Print with number halshs-00451621.

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Date of creation: 2009
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Publication status: Published, Labour, 2009, 23, 3, pp. 535-558
Handle: RePEc:hal:journl:halshs-00451621

Note: View the original document on HAL open archive server: http://halshs.archives-ouvertes.fr/halshs-00451621/en/
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Related research

Keywords: Time preference; Hyperbolic discounting; job search;

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Cited by:
  1. Thomas van Huizen & Janneke Plantenga, 2013. "Job Search Behaviour and Time Preferences: Evidence from the Netherlands," Working Papers 13-03, Utrecht School of Economics.
  2. Laibson, David, 1997. "Golden Eggs and Hyperbolic Discounting," The Quarterly Journal of Economics, MIT Press, vol. 112(2), pages 443-77, May.
  3. Edward L. Glaeser & David I. Laibson & José A. Scheinkman & Christine L. Soutter, 2000. "Measuring Trust," The Quarterly Journal of Economics, MIT Press, vol. 115(3), pages 811-846, August.
    • Glaeser, Edward Ludwig & Laibson, David I. & Scheinkman, Jose A. & Soutter, Christine L., 2000. "Measuring Trust," Scholarly Articles 4481497, Harvard University Department of Economics.

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