An Analysis of Subjective Views of Job Insecurity

In the 1997 and 1998 waves of the British Household Panel Survey, workers are asked to assess their level of job security in terms of the probability of becoming unemployed within the next year. We examine whether these perceptions of insecurity are purely subjective or are systematically related to certain characteristics of the worker and their current job. The responses offered by workers suggest that around 10% are in fear of becoming unemployed, and this fear is not persistently confined to the same workers or to particular occupational groups. Individuals with a history of unemployment and those holding short-term employment contracts are found to report the greatest levels of insecurity. Finally, we find that workers' perceptions of unemployment are strong predictors of actual unemployment experiences occurring in the subsequent year. We therefore conclude that such subjective measures of insecurity do convey useful information that may be used in further analyses of the workings of the labour market.