Time-Inconsistent Search Preferences
RCTReview
Unemployed youth may underinvest in costly search activities due to present-biased time preferences, overvaluing immediate leisure or immediate cash relative to future wage gains.
Picture this
Present bias causes individuals to delay upfront costs (like traveling to job boards) for immediate comfort, even when long-term returns are high. It works like procrastinating on gym visits because the sweat is immediate while the health benefit is months away.
What the evidence says
12% of job-seekers exhibited incentivized present bias at baseline. Workshop treatment effects on permanent employment were significantly higher for present-biased individuals who failed to anticipate their time-inconsistency (p < 0.05).
- Who was studied
- N = 2,067 young job-seekers aged 18–29 in Addis Ababa, Ethiopia.
- How
- Incentivized mobile token allocation experiment measuring commitment revisions between 30 and 60 days, combined with baseline sophistication queries.
What to do
Combine commitment devices and immediate structured milestones with skill certification to counteract present-biased procrastination in job search.
From the source
"We also collected an incentivised measure of present bias... Individuals who allocate more money to the first payment date are considered present biased."
Anonymity_or_Distance_Job_Search_and_Labour_Market_Exclusion_in.pdf