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Adaptive Preferences in the Labour Market

Adaptive Preferences in the Labour Market Economy Near Us (XLII)

The effects of digital technology on the labour market 

We are currently witnessing a reconfiguration of labour market requirements both in terms of employment and in terms of significant changes in skills and knowledge required by digital technologies, with an effect on contractual work arrangements. Under the influence of technology, especially digital technology, some jobs change, others disappear, others are created, thus we are witnessing a phenomenon of polarization of employment with implications, including on wages, leading to increasing inequalities in society.

Also, the changing preferences of workers in terms of working time motivates employers to offer jobs belonging to the following three levels: worker-oriented job offers with atypical forms of work, such as part-time, casual, home-office work (atypical forms of work refer to employment relationships that are outside the traditional model of full-time work, with a single employer considered to be a socially secure, permanent job structure with standard working hours that can guarantee a secure income and access to national health and pension systems), self-employment and mixed forms of work. Interactions between new technologies, jobs, work organization and workers are bringing structural changes to the labour market.

The scale and nature of work mediated by digital work platforms involves highly educated workers, enables them to work remotely and in new structures, but creates challenges for policy makers. Strong trends to benefit from a flexible work schedule, to work on your own, induced by digitalization lead to three main areas of interest, namely: the development of skills for workers, labour market regulations, labour market programs and public policies in the field of the labour market. Based on this reality, some theoretical aspects of the concept of adaptive preference will be presented below. 

Adaptive preference – brief theoretical aspects 

The most recent approach to the concept of adaptive preference defines it (for the economic domain) as a preference that arises, changes, and manifests itself in a process of adaptation. From a semantic point of view, the term adaptive preference has two components: the noun component (preference) and the adjectival component (adaptive). Seen in a general sense, any preference is adaptive because it cannot function in an environment with which it is in functional contradiction. The adaptation process contains two ontological entities, structurally or functionally related to each other, and comprises an adapting entity, which will be called the adaptant, and an entity to which the previous entity adapts, which will be called the adapter. The relationship between the two entities is called an adaptive relationship, it is dynamic in nature and is subject to norms of action-reaction so that the ecological system of which they are part of survives.

According to specialists, human behaviour carried out under the authority of preference includes three other types of behaviour, namely behaviour driven by rationality (considering the human individual as possessing hyper-rationality in choosing the optimal decision), behaviour driven by expectation (the decision taken by the individual is a combination of rationality and emotion) and behaviour driven by faith (religious beliefs, ethical values underlying the individual’ s decisions and actions).

Other approaches to the concept of adaptive preference for the social domain can be found in the specialty literature in the works of Jon Elster, Amartya Sen, and Martha C. Nussbaum. Jon Elster explains the concept of preference by an individual’ s inability to fulfil a preference or aspiration, a phenomenon known as “sour grapes” (the fox who cannot pick grapes because they hang too high for her begins to tell herself that they are sour anyway and no longer wants to eat them), Amartya Sen addresses the issue of preference by stating that someone in a difficult situation could have adapted to that situation and learned to be satisfied with little, and Martha C. Nussbaum understands adaptive preferences as the preferences of people who do not want to have items on her list of capabilities; these latter preferences are distorted because of injustice, oppression and ignorance. 

Adaptive preferences of the labour market 

For the present period, flexible working hours, among other atypical forms of employment are expected to become more widespread in the labour market. Considered an important part of life, work contributes to the wellbeing of the individual. Adaptive preferences in the labour market have often been seen as a predilection for a particular state of affairs out of a limited set of options formed in working conditions deemed unfair to which workers have been or are obliged to submit in order to meets material and ethical needs.

Jobs with a strong digital component will influence the adaptive preferences of individuals involving financial motivations, the desire for a certain social status and their perceptions about the attitude towards risk. At societal level, the workers’ adaptive preferences will be influenced by the concern to obtain jobs that have this digital technological component, a component with the potential to increase labour productivity in society, increase workers’ incomes and ensure social welfare, to bring about changes in the organization of work, with implications for the capacity of existing policies and programs to ensure inclusion in the labour market, the quality of jobs and the development of skills.

 
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OEconomica No. 1, 2016