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The effect of job insecurity on labour supply

Jara Tamayo, HX (2015) 'The effect of job insecurity on labour supply.' Australian Journal of Labour Economics, 18 (2). 187 - 204. ISSN 1328-1143


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The aim of this paper is to analyse the efect of job insecurity on labour supply. We propose an extension of traditional discrete choice models of labour supply in order to allow for the introduction of non-pecuniary job attributes in the analysis. In our extended model, the choice alternatives are characterised by bundles of income, hours of work and job insecurity. We compare the predictive power and labour supply elasticities obtained with our model to those of a traditional model where only income and discrete hours choices characterise a job. The results show that once job insecurity is included in the discrete choice alternatives, the predictive power of the model improves signifïcantly. Labour supply elasticities are significantly higher than those obtained with a traditional model and increase with the level of job insecurity. Finally, a decrease of job insecurity at work has a positive and significant effect on participation. Policies aimed at improving working conditions could, in this sense, be useful to create incentives in labour market.

Item Type: Article
Uncontrolled Keywords: Discrete choice, Labour supply, Job insecurity
Subjects: H Social Sciences > H Social Sciences (General)
Divisions: Faculty of Social Sciences > Institute for Social and Economic Research
Depositing User: Holguer Jara Tamayo
Date Deposited: 01 Apr 2016 10:44
Last Modified: 02 Jan 2018 11:15

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