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Estimating the Dynamics of Time and Risk Preferences in the Bulgarian Labour Market

Author

Listed:
  • Ilia Atanasov
  • Alexander Mihailov
  • Stefan Petranov

Abstract

The aim of this article is to present dynamic estimates of the discount factor and the coefficient of relative risk aversion for the Bulgarian labour market, using an innovative quantitative approach. For this purpose, we use a modified version of McCall's job search model. Our estimates for the period 2004-2024 reveal four distinct, structural phenomena: (i) a pro-cyclical discount factor, (ii) a counter-cyclical coefficient of relative risk aversion, (iii) a marked divergence between the behavioural parameters of the mean and median worker, and (iv) relatively low estimates for the parameters of interest compared to other economies. Based on these results, the article draws conclusions about the basic characteristics of the labour market in Bulgaria and proposes relevant policies.

Suggested Citation

  • Ilia Atanasov & Alexander Mihailov & Stefan Petranov, 2026. "Estimating the Dynamics of Time and Risk Preferences in the Bulgarian Labour Market," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 6, pages 132-157.
    • Handle: RePEc:bas:econst:y:2026:i:6:p:132-157
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    More about this item

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

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