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Oxford Economic Papers Advance Access originally published online on June 7, 2008
Oxford Economic Papers 2009 61(2):207-239; doi:10.1093/oep/gpn017
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© Oxford University Press 2008 All rights reserved

Job security and job protection

Andrew Clark* and Fabien Postel-Vinay{dagger}

*Paris School of Economics and IZA; e-mail: andrew.clark{at}ens.fr
{dagger}Department of Economics, University of Bristol, 8 Woodland Road, Bristol BS8 1TN, UK; Université de Paris I (Panthéon-Sorbonne), CEPR, and IZA; e-mail: Fabien.Postel-Vinay{at}bristol.ac.uk

JEL classifications: J28, J65, I31


  Abstract

We construct indicators of the perception of job security for various job types in 12 European countries using individual data from the European Community Household Panel (ECHP). We then consider the relation between reported job security and OECD summary measures of Employment Protection Legislation (EPL) strictness on the one hand, and Unemployment Insurance Benefit (UIB) generosity on the other. We explicitly recognize that insecure types may attempt to self-select into more secure jobs. After modeling this selection, we find that workers feel most secure in permanent public sector jobs, least secure in temporary jobs, with permanent private sector jobs occupying an intermediate position. We also find that perceived job security in both permanent private and temporary jobs is positively correlated with UIB generosity, while the relationship with EPL strictness is negative: workers feel less secure in countries where jobs are more protected. These correlations are absent for permanent public jobs, suggesting that such jobs are perceived to be by and large insulated from labor market fluctuations.


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