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Has Job Security Vanished in Large Corporations?

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  • Steven G. Allen
  • Robert L. Clark
  • Sylvester J. Schieber

Abstract

The prevailing wisdom in media accounts is that job stability has vanished, especially for those in large corporations. Academic studies of job stability have found little difference between the 1990s and earlier decades, but these studies have not been able to focus on large firms. This paper provides the first detailed analysis of job stability in large corporations in the 1990s using a sample of 51 firms that are clients of Watson Wyatt Worldwide. We find that mean tenure and the percentage of employees with 10 or more years of service have actually increased in our sample. Even in large firms with shrinking employment, the odds that a worker would be with the same employer five years later were higher than the same odds for the labor market as a whole. There is no evidence that mid-career employees have been singled out in downsizing decisions; their turnover rate is the same in both growing and downsizing firms. Regression analysis shows that the impact of downsizing is still being borne by the most junior workers and that there is no evidence that rising wage differentials by experience are encouraging firms to substitute junior for senior workers.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 6966.

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Date of creation: Feb 1999
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Publication status: published as Neumark, David (ed.) On The Job: Is Long-Term Employment a Thing of the Past? New York: Russell Sage Foundation, 2001.
Handle: RePEc:nbr:nberwo:6966

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  1. Jagadeesh Gokhale & Erica L. Groshen & David Neumark, 1993. "Do Hostile Takeovers Reduce Extramarginal Wage Payments?," NBER Working Papers 4346, National Bureau of Economic Research, Inc.
  2. Neumark, David & Polsky, Daniel & Hansen, Daniel, 1999. "Has Job Stability Declined Yet? New Evidence for the 1990s," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 17(4), pages S29-64, October.
  3. Diebold, Francis X & Neumark, David & Polsky, Daniel, 1997. "Job Stability in the United States," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 15(2), pages 206-33, April.
  4. Jong-Il Kim & Lawrence J. Lau, 1996. "The sources of Asian Pacific economic growth," Canadian Journal of Economics, Canadian Economics Association, Canadian Economics Association, vol. 29(s1), pages 448-54, April.
  5. Hallock, Kevin F, 1998. "Layoffs, Top Executive Pay, and Firm Performance," American Economic Review, American Economic Association, American Economic Association, vol. 88(4), pages 711-23, September.
  6. Jaeger, David A & Stevens, Ann Huff, 1999. "Is Job Stability in the United States Falling? Reconciling Trends in the Current Population Survey and Panel Study of Income Dynamics," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 17(4), pages S1-28, October.
  7. Lazear, Edward P, 1979. "Why Is There Mandatory Retirement?," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 87(6), pages 1261-84, December.
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Cited by:
  1. Lilia Costabile, 2002. "Aspetti economici del "Libro Bianco del Ministero del Lavoro"," STUDI ECONOMICI, FrancoAngeli Editore, FrancoAngeli Editore, vol. 2002(77).

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