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Social Indicators Research
Published in: Social Indicators Research 3/2018

08-09-2017

The Value of Job Security: Does Having It Matter?

Authors: Eitan Hourie, Miki Malul, Raphael Bar-El

Published in: Social Indicators Research | Issue 3/2018

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Abstract

In this paper we analyze the preferences about job security using tools from behavioral economics. We focus on the non-pecuniary value of job security and specifically whether this value depends on the current position of employees as tenured or non-tenured. Using a sample of 107 Israeli social workers, randomly allocated between tenured and non-tenured positions, we demonstrate that the non-pecuniary value of job security is about 20% of the wage. We also found that this value depends on the point of reference of the employees. Those with tenure place a higher value on job security, as do those with a higher level of loss aversion.
previous article Household Chores, Time Allocation and Job Performance: An Empirical Study from Chinese Manufacturing Workers
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Footnotes
1
Researchers have argued that the loss of psychological power is more than twice that of the power of a profit (Johnson et al. 2006).
 
2
The National Longitudinal Survey of Youth, or NLSY (http://​www.​bls.​gov/​nls/​), is a broadly representative data set of adults and children with many years of data collection. The NLSY has been used in hundreds of published research studies on children, youth, adults and families and is one of the most important data sets for social science research in this area.
 
3
We conducted an additional experiment with 40 participants. This time the response to the first question \(I_{t}^{ *}\) was used to choose \(I_{t}^{0}\) for the second question (the second question was presented with a few levels of \(I_{t}^{0}\)). Doing so eliminated the effect of diminishing marginal utility on the replacement rate. The result when moving from tenured to non-tenured positions was 1.26 (compared to 1.30 in the original sample), and when moving from non-tenured to tenured positions it was 1.07 (compared to 1.14 in the original sample). Therefore, we can conclude that the results are in the same direction even after controlling for diminishing marginal utility.
 
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Metadata
Title
The Value of Job Security: Does Having It Matter?
Authors
Eitan Hourie
Miki Malul
Raphael Bar-El
Publication date
08-09-2017
Publisher
Springer Netherlands
Published in
Social Indicators Research / Issue 3/2018
Print ISSN: 0303-8300
Electronic ISSN: 1573-0921
DOI
https://doi.org/10.1007/s11205-017-1748-4

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