Measuring the Utility Cost of Temporary Employment Contracts before Adaptation: A Conjoint Analysis Approach
AbstractThis 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 InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 14166.
Date of creation: 13 Nov 2008
Date of revision:
Utility; Temporary contracts; Adaptation; Conjoint analysis;
Other versions of this item:
- Konstantinos Pouliakas & Ioannis Theodossiou, 2010. "Measuring the Utility Cost of Temporary Employment Contracts Before Adaptation: A Conjoint Analysis Approach," Economica, London School of Economics and Political Science, vol. 77(308), pages 688-709, October.
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
- C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-03-28 (All new papers)
- NEP-BEC-2009-03-28 (Business Economics)
- NEP-LAB-2009-03-28 (Labour Economics)
- NEP-UPT-2009-03-28 (Utility Models & Prospect Theory)
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