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Job Search Behaviour and Time Preferences: Testing Exponential Versus Hyperbolic Discounting

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  • Thomas Huizen
  • Janneke Plantenga

Abstract

This article examines the effects of time preferences on job search behaviour and tests the exponential versus the hyperbolic discounting model. Theoretically, the relations between time preferences and job search intensity, reservation wages and the exit rate depend on whether exponential or hyperbolic discounting is assumed. By analysing these relations empirically we test which model of intertemporal choice better explains the results. Using the DNB Household Survey, a Dutch longitudinal survey, we capture variation in time preferences by a psychological construct that measures an individual’s future orientation. The empirical results are consistent with the hyperbolic discounting model. Copyright Springer Science+Business Media New York 2014

Suggested Citation

  • Thomas Huizen & Janneke Plantenga, 2014. "Job Search Behaviour and Time Preferences: Testing Exponential Versus Hyperbolic Discounting," De Economist, Springer, vol. 162(3), pages 223-245, September.
    • Handle: RePEc:kap:decono:v:162:y:2014:i:3:p:223-245
    DOI: 10.1007/s10645-014-9231-y
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    References listed on IDEAS

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    Cited by:

    1. van Huizen, Thomas & Alessie, Rob, 2015. "Time preferences and career investments," Labour Economics, Elsevier, vol. 35(C), pages 77-92.
    2. Chiara Mussida & Luca Zanin, 2020. "Determinants of the Choice of Job Search Channels by the Unemployed Using a Multivariate Probit Model," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 152(1), pages 369-420, November.
    3. Preuss, Malte, 2021. "Intra-individual stability of two survey measures on forward-looking attitude," Journal of Economic Behavior & Organization, Elsevier, vol. 190(C), pages 201-227.

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    More about this item

    Keywords

    Job search; Time preferences; Unemployment; Hyperbolic discounting; D03; J64;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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