Measuring the Utility Cost of Temporary Employment Contracts Before Adaptation: A Conjoint Analysis Approach
Version of Record online: 9 APR 2009
© The London School of Economics and Political Science 2009
Volume 77, Issue 308, pages 688–709, October 2010
How to Cite
POULIAKAS, K. and THEODOSSIOU, I. (2010), Measuring the Utility Cost of Temporary Employment Contracts Before Adaptation: A Conjoint Analysis Approach. Economica, 77: 688–709. doi: 10.1111/j.1468-0335.2009.00786.x
- Issue online: 9 APR 2009
- Version of Record online: 9 APR 2009
- Final version received 13 November 2008.
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.