Job insecurity and the difficulty of regaining employment: An empirical study of unemployment expectations

It is widely assumed that British workers have become more insecure over the last decade. This paper sets out to establish whether the popular assumption is correct. We examine changes in measures of workers' insecurity using direct measures of their unemployment expectations, using data colleted by the Social Change and Economic Life Initiative (SCELI) in 1986 and by the Skills Survey (SS) in 1997. The paper also investigates how closely subjective measures of insecurity are related to objective measures commonly used as proxies, and analyses how these expectations are determined. It finds that: i. In aggregate job insecurity, measured as the expected risk of job loss, has changed little, while the expected difficulty of regaining employment has fallen over the last decade. ii. Job insecurity has increased among non-manual workers, while it has fallen among non-manual workers, who were traditionally less secure in the first place. iii. Unemployment in the external labour market has a large impact on individuals' expectations of unemployment and on their expectations of re-employment. vi. There is a strong positive association between a job being temporary and insecurity. It is valid, therefore, to see a possible problem of rising subjective insecurity if there is a rising proportion of temporary workers in the labour force. v. Job tenure and job insecurity follow a U-shaped relationship. vi. The fall in unemployment from 1986 to 1997 would have been predicted to induce a substantial fall in job insecurity, that this fall did not materialise suggests that there has been an upward shift in job insecurity.