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

Thomas Huizen () and Janneke Plantenga

De Economist, 2014, vol. 162, issue 3, 223-245

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

Keywords: Job search; Time preferences; Unemployment; Hyperbolic discounting; D03; J64 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (3)

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DOI: 10.1007/s10645-014-9231-y

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