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

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  • KONSTANTINOS POULIAKAS
  • IOANNIS THEODOSSIOU

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 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.

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  • 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.
  • Handle: RePEc:bla:econom:v:77:y:2010:i:308:p:688-709
    DOI: 10.1111/j.1468-0335.2009.00786.x
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    2. Paolo Mariani & Andrea Marletta & Mauro Mussini & Mariangela Zenga, 2021. "Professional Profiles and Job Requirements in Labour Demand: An Analysis of the Italian Information Technology Sector," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 156(2), pages 651-667, August.
    3. Adrian Chadi & Clemens Hetschko, 2013. "Flexibilisation without Hesitation? Temporary Contracts and Workers’ Satisfaction," IAAEU Discussion Papers 201304, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
    4. Humburg, Martin & van der Velden, Rolf, 2015. "Skills and the graduate recruitment process: Evidence from two discrete choice experiments," Economics of Education Review, Elsevier, vol. 49(C), pages 24-41.
    5. 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.
    6. Joseph Lanfranchi & Mathieu Narcy, 2022. "How do prosocial motivation and performance‐related pay interact in the workplace context? Evidence from the non‐profit sector," Kyklos, Wiley Blackwell, vol. 75(3), pages 436-455, August.
    7. 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.
    8. Migheli, Matteo, 2015. "Gender at work: Incentives and self-sorting," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 55(C), pages 10-18.
    9. Pouliakas, Konstantinos & Theodossiou, Ioannis, 2012. "Rewarding carrots and crippling sticks: Eliciting employee preferences for the optimal incentive design," Journal of Economic Psychology, Elsevier, vol. 33(6), pages 1247-1265.
    10. Ilias Livanos & Evi Tzika, 2022. "Precarious Employment in Greece:economic crisis, labour market flexibilisation, and vulnerable workers," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 171, Hellenic Observatory, LSE.
    11. Joan Sorribes & Dolors Celma & Esther Martínez‐Garcia, 2021. "Sustainable human resources management in crisis contexts: Interaction of socially responsible labour practices for the wellbeing of employees," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 28(2), pages 936-952, March.
    12. Konstantinos Pouliakas, 2010. "Pay Enough, Don't Pay Too Much or Don't Pay at All? The Impact of Bonus Intensity on Job Satisfaction," Kyklos, Wiley Blackwell, vol. 63(4), pages 597-626, November.
    13. Panos, Georgios & Theodossiou, Ioannis, 2009. "Union Mediation and Adaptation to Reciprocal Loyalty Arrangements," MPRA Paper 15471, University Library of Munich, Germany.
    14. Elzir Assy, Angela & Ribeiro, Tiago & Robalino, David A. & Rosati, Furio C. & Sanchez Puerta, Maria Laura & Weber, Michael, 2019. "The Jobs That Youth Want and the Support They Need to Get Them: Evidence from a Discrete Choice Experiment in Kenya," IZA Discussion Papers 12864, Institute of Labor Economics (IZA).
    15. Fabio Berton & Matteo Migheli, 2015. "Estimating the marginal rate of substitution between wage and employment protection," LABORatorio R. Revelli Working Papers Series 143, LABORatorio R. Revelli, Centre for Employment Studies.
    16. Livianos, Ilios & Tzika, Evi, 2022. "Precarious employment in Greece: economic crisis, labour market flexibilisation, and vulnerable workers," LSE Research Online Documents on Economics 115058, London School of Economics and Political Science, LSE Library.

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    More about this item

    JEL classification:

    • 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; Probabilities

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