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

  • KONSTANTINOS POULIAKAS
  • IOANNIS THEODOSSIOU

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 seven 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 neutralizes events that challenge their sense of wellbeing, such as job insecurity. Copyright (c) The London School of Economics and Political Science 2009.

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Article provided by London School of Economics and Political Science in its journal Economica.

Volume (Year): 77 (2010)
Issue (Month): 308 (October)
Pages: 688-709

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Handle: RePEc:bla:econom:v:77:y:2010:i:308:p:688-709
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