Time Preferences and Job Search: Evidence from France

Bassem Ben Halima and Mohamed Ben Halima ()
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Mohamed Ben Halima: GATE Lyon Saint-Étienne - Groupe d'Analyse et de Théorie Economique Lyon - Saint-Etienne - ENS de Lyon - École normale supérieure de Lyon - Université de Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet - Saint-Étienne - CNRS - Centre National de la Recherche Scientifique
Authors registered in the RePEc Author Service: Mohamed Ali Ben Halima

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Abstract: Increasing impatience reduces search efforts of unemployed job seekers and therefore decreases the exit rate from unemployment. Also, impatience reduces reservation wage and increases the exit rate. To determine the overall effect of impatience on the exit rate from unemployment, we distinguish between exponential and hyperbolic time preferences. Search effort dominates the reservation wage and decreases the exit rate from unemployment if individuals have hyperbolic, rather than exponential, preferences. Using the French sample of the European Household Panel Survey, we found that search effort has a strong effect on the duration of unemployment, whereas the reservation wage is not significant. This result shows that the job seekers have hyperbolic preferences. Hyperbolic preferences affect problems associated with job search and policies aimed at reducing unemployment.

Keywords: Time preference; Hyperbolic discounting; job search (search for similar items in EconPapers)
Date: 2009
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00451621v1
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Citations: View citations in EconPapers (11)

Published in LABOUR, 2009, 23 (3), pp. 535-558

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Journal Article: Time Preferences and Job Search: Evidence from France (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00451621

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