Self Determination Theory (SDT) predicts that employees who use extrinsic motivation to search for work are less successful and subsequently experience lower psychological wellbeing than their counterparts who use intrinsic motivation. Using Australian labour market data, we find strong support for SDT. We find that workers who hold casual employment or who are underemployed (i.e. who have extrinsic motives to search for work) are less likely to find alternate (better) work. Our findings suggest that labour market policies trending towards 'labour market flexibility / deregulation' -which provide workers with extrinsic motives to search for work - will not contribute to psychological wellbeing of workers. Since there is no evidence that such policies reduce aggregate unemployment levels, there are no microeconomic or macroeconomic reasons to justify them.
The Aftermath of the Crisis: Incorporating the 12th Path to Full Employment Conference and 17th National Conference on Unemployment. The Aftermath of the Crisis: Incorporating the 12th Path to Full Employment Conference and 17th National Conference on Unemployment: Proceedings: Refereed Papers (Newcastle, NSW 2-3 December, 2010) p. 222-235