This paperexamines whether subjective expectations of unemployment are reliable indicators of the probability of becoming unemployed, and investigates their association with wage growth. We find that workers’ fears of unemployment are increased by their previous unemployment experience and by the unemployment experiences of a close friend, and are associated with other objective indicators of insecure jobs. We then show that unemployment fear predicts future unemployment, above and beyond observed objective variables. High fears of unemployment are found to be associated with significantly lower levels of wage growth for men, but to have no significant link with wage growth for women.
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Paper provided by Department of Economics, University of Kent in its series Studies in Economics with number
0813.
Length: Date of creation: Nov 2008 Date of revision: Handle: RePEc:ukc:ukcedp:0813
Contact details of provider: Postal: Department of Economics, University of Kent at Canterbury, Canterbury, Kent, CT2 7NP Phone: +44 (0)1227 764000 Fax: +44 (0)1227 827850 Web page: http://www.ukc.ac.uk/economics/
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David Campbell & Alan Carruth & Andrew Dickerson & Francis Green, 2007.
"Job insecurity and wages,"
Economic Journal,
Royal Economic Society, vol. 117(518), pages 544-566, 03.
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Find related papers by JEL classification: J60 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - General J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
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