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Measuring the Utility Cost of Temporary Employment Contracts before Adaptation: A Conjoint Analysis Approach

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  • Pouliakas, Konstantinos
  • Theodossiou, Ioannis

Abstract

This study attempts to estimate the ‘utility cost’ of temporary employment contracts purged of the psychological effects of adaptation. A conjoint analysis experiment is used that examines the ex-ante contract preferences of a unique sample of low-skilled employees from 7 European countries. It is shown that permanent contract holders request a significant wage premium to move to a temporary job. In contrast, temporary workers are indifferent between permanent and temporary contracts, ceteris paribus. The evidence suggests that individuals have a psychological immune system which neutralises events that challenge their sense of well-being, such as job insecurity. The methodology developed in this paper can provide policymakers with an alternative and relatively inexpensive method of quantifying the transitional loss (or gain) in welfare that individuals might experience in response to changing labour market policies.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 14166.

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Date of creation: 13 Nov 2008
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Handle: RePEc:pra:mprapa:14166

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Keywords: Utility; Temporary contracts; Adaptation; Conjoint analysis;

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References

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Cited by:
  1. Adrian Chadi & Clemens Hetschko, 2013. "Flexibilisation without Hesitation? Temporary Contracts and Workers’ Satisfaction," IAAEU Discussion Papers, Institute of Labour Law and Industrial Relations in the European Union (IAAEU) 201304, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
  2. Pouliakas, Konstantinos & Theodossiou, Ioannis, 2005. "Socio-Economic Differences in the Satisfaction of High-Pay and Low-Pay Jobs in Europe," MPRA Paper 16733, University Library of Munich, Germany, revised 10 Aug 2009.
  3. Konstantinos, Pouliakas & Ioannis, Theodossiou, 2010. "An Inquiry Into the Theory, Causes and Consequences of Monitoring Indicators of Health and Safety At Work," MPRA Paper 20336, University Library of Munich, Germany.
  4. Pouliakas, Konstantinos, 2010. "Pay Enough, Don't Pay Too Much or Don't Pay at All? The Impact of Bonus Intensity on Job Satisfaction," IZA Discussion Papers 4713, Institute for the Study of Labor (IZA).
  5. Pouliakas, Konstantinos & Theodossiou, Ioannis, 2012. "Rewarding carrots and crippling sticks: Eliciting employee preferences for the optimal incentive design," Journal of Economic Psychology, Elsevier, Elsevier, vol. 33(6), pages 1247-1265.
  6. Pouliakas, Konstantinos & Theodossiou, Ioannis, 2010. "An Inquiry Into The Theory, Causes And Consequences Of Monitoring Indicators Of Health And Safety At Work," SIRE Discussion Papers, Scottish Institute for Research in Economics (SIRE) 2010-120, Scottish Institute for Research in Economics (SIRE).

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