Worker
Perceptions of Job Insecurity in the Mid-1990s:
Evidence from the Survey of Economic Expectations
Charles
F.Manski and John D. Straub
Abstract
This paper analyzes the probabilistic measures of
job insecurity that have recently become available through the nationwide
Survey of Economic Expectations (SEE). Since 1994, employed SEE
respondents have been asked questions eliciting their expectations
of job loss in the coming year and their expectations of a good
outcome should they lose their current job and have to engage in
job search. The responses of 3600 persons interviewed from 1994
through early 1998 are analyzed here. It is found that workers vary
considerably in their perceptions of job insecurity. Most workers
perceive little or no risk but some perceive moderate to high risk.
Expectations of job loss tend to decrease markedly with age, but
so do expectations of a good outcome should job search become necessary.
The net result is that composite job insecurity tends not to vary
at all with age. Subjective probabilities of job loss tend to decrease
with schooling while subjective probabilities of good search outcomes
tend to increase; hence composite job insecurity tends to decrease
with schooling. Perceptions of job insecurity vary little by sex
but substantially by race. The main differences are that subjective
probabilities of job loss among blacks tend to be nearly double
those of whites. Self-employed workers see themselves as facing
less job insecurity than do those who work for others. Workers tended
to perceive less job insecurity in 1996 and 1997 than in 1994 and
1995. Moving beyond descriptive analysis, the paper connects the
emiprical findings to modern theories of the labor market. The theory
of job search is used to interpret the empirical finding that the
distribution of search-outcome expectations is symmetric and quite
dispersed.
Charles F. Manski, Department
of Economics, Northwestern University
John D. Straub, Department of Economics, University
of Wisconsin-Madison
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