Publication type
Thesis/Degree/Other Honours
Author
Publication date
June 1, 1999
Abstract:
We use two measures of job insecurity and follow their changes over time. First, we analyse the impact of unemployment on earnings on the basis that the cost as well as the probability of unemployment may be the cause of insecurity. Since the probability of becoming unemployed exhibits no secular trend over the last twenty years, a higher cost of unemployment have raised concerns about job insecurity. We use the British Household Panel Survey and the New Earnings Survey to show that the cost of unemployment has increased for men outside the bottom skilled group. The increase is particularly strong for high skilled men, particularly those older than 50 and on a contract covered by a collective agreement. Duration is also an important determinant of the cost of unemployment with longer spells causing higher losses. As far as women are concerned, the effects are considerably lower than for men, but follow approximately the same pattern over time and across groups of individuals. The lower losses seem to be attributable mainly to the fact that women tend to suffer a reduction in hours worked rather than a cut in hourly earnings.
As a second measure of insecurity, we look at the variance of future earnings shocks to find that individuals in the high skilled groups have experienced a higher increase than the low skilled. This is the cause of higher precautionary savings and therefore reduced consumption. We also find evidence of conditional heteroskedasticity and this seems to suggest that high skilled individuals react to uncertainty more than the low skilled.
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Notes
not held in Res Lib - bibliographic reference only
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