Procrastinators and Hyperbolic Discounters : Probability of Transition from Temporary to Full-time Employment

Lee, Sun Youn; Ohtake, Fumio

Procrastinators and Hyperbolic Discounters : Probability of Transition from Temporary to Full-time Employment

Lee, Sun Youn; Ohtake, Fumio

Institute of Social and Economic Research Discussion Papers, 2012, 841

Number of Access:536（2025-11-02 06:09 Counts）

Identifier to cite or link to this item: https://hdl.handle.net/11094/23407

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Title	Procrastinators and Hyperbolic Discounters : Probability of Transition from Temporary to Full-time Employment
Creator	NRID 1000040711924 1000040711924 CreatorName Lee, Sun Youn
Creator	NRID 1000050176913 1000050176913 ORCID 0000-0002-8825-7446 0000-0002-8825-7446 researchmap permalink ohtake ohtake Scopus Author ID 6701666319 6701666319 CreatorName Ohtake, Fumio
Subject	time preferences
	temporary employment
	ATT estimation
Abstract	Temporary agency work (TAW) is believed to facilitate the matching between firms and on-the-job searchers. This leads to shortening of the unemployment and job search duration. On the other hand, firms that hire temporary workers have less incentive to train them, which makes it difficult for low-skilled temporary workers to find a better job in future. Current literature has not established whether TAW employment improves the welfare of either or both the employers and employees. Therefore, this paper examines the effect of TAW employment in the Japanese labor market on employment transitions focusing on individual time preferences. Investments in one’s career involve a trade-off between immediate costs and later rewards, and thus, individual heterogeneity in time preferences may explain the behavioral patterns of labor force. We find that TAW employees have a tendency toward impatience and hyperbolic discounting. In addition, those who have held temporary job are less likely to move into full-time job positions, but no significant wage differences are observed. The strength of the negative effects on the transition probabilities declines over time but the significant effects remain over the following years. Our results indicate that TAW for employees in Japan is more likely to function as a “dead-end” rather than “stepping stone” toward stable full-time employment.
Publisher	The Institute of Social and Economic Research, Osaka University
Source Title	Institute of Social and Economic Research Discussion Papers
Volume (Issue)	841
Date of Issued	2012-05
Language	English
Handle URL	https://hdl.handle.net/11094/23407
Relation.references	URI https://www.iser.osaka-u.ac.jp/static/resources/docs/dp/2012/DP0841.pdf
Access Rights	metadata only access
Category	ディスカッション／ワーキング・ペーパー DP/WP
Category	Institute of Social and Economic Research Discussion Papers

Resource Type	technical report
Local Type	DP/WP
DCMI Type	Text
DCTERMS.bibliographicCitation	Institute of Social and Economic Research Discussion Papers. 2012, 841
DC.title	Procrastinators and Hyperbolic Discounters : Probability of Transition from Temporary to Full-time Employment
DC.creator	Lee, Sun Youn
DC.creator	Ohtake, Fumio
DC.publisher	The Institute of Social and Economic Research, Osaka University
DC.language' scheme='DCTERMS.RFC1766	English
DC.type' scheme='DCTERMS.DCMIType	Text
DCTERMS.issued' scheme='DCTERMS.W3CDTF	2012-05
DC.relation' scheme='DCTERMS.URI	https://www.iser.osaka-u.ac.jp/static/resources/docs/dp/2012/DP0841.pdf
DC.subject	time preferences
	temporary employment
	ATT estimation
DCTERMS.abstract	Temporary agency work (TAW) is believed to facilitate the matching between firms and on-the-job searchers. This leads to shortening of the unemployment and job search duration. On the other hand, firms that hire temporary workers have less incentive to train them, which makes it difficult for low-skilled temporary workers to find a better job in future. Current literature has not established whether TAW employment improves the welfare of either or both the employers and employees. Therefore, this paper examines the effect of TAW employment in the Japanese labor market on employment transitions focusing on individual time preferences. Investments in one’s career involve a trade-off between immediate costs and later rewards, and thus, individual heterogeneity in time preferences may explain the behavioral patterns of labor force. We find that TAW employees have a tendency toward impatience and hyperbolic discounting. In addition, those who have held temporary job are less likely to move into full-time job positions, but no significant wage differences are observed. The strength of the negative effects on the transition probabilities declines over time but the significant effects remain over the following years. Our results indicate that TAW for employees in Japan is more likely to function as a “dead-end” rather than “stepping stone” toward stable full-time employment.
DC.format	23407
citation_title	Procrastinators and Hyperbolic Discounters : Probability of Transition from Temporary to Full-time Employment
citation_author	Lee, Sun Youn
citation_author	Ohtake, Fumio
citation_publisher	The Institute of Social and Economic Research, Osaka University
citation_language	English
citation_date	2012-05
citation_journal_title	Institute of Social and Economic Research Discussion Papers
citation_volume	841
citation_public_url	https://hdl.handle.net/11094/23407
citation_abstract_html_url	https://www.iser.osaka-u.ac.jp/static/resources/docs/dp/2012/DP0841.pdf

Procrastinators and Hyperbolic Discounters : Probability of Transition from Temporary to Full-time Employment

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