The Value of Job Security: Does Having It Matter?

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.