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Worker Perceptions of Job Insecurity in the Mid-1990s: Evidence from the Survey of Economic Expectations

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  • Charles F. Manski
  • 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.

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Bibliographic Info

Paper provided by Institute for Policy Resarch at Northwestern University in its series IPR working papers with number 98-27.

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Handle: RePEc:wop:nwuipr:98-27

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  1. Guiso, Luigi & Jappelli, Tullio & Terlizzese, Daniele, 1992. "Earnings Uncertainty and Precautionary Saving," CEPR Discussion Papers 699, C.E.P.R. Discussion Papers.
  2. J. Dominitz & C. F. Manski, . "Using expectations data to study subjective income expectations," Institute for Research on Poverty Discussion Papers 1050-94, University of Wisconsin Institute for Research on Poverty.
  3. Jeff Dominitz & Charles F. Manski, 1994. "Eliciting Student Expectations Of The Returns To Schooling," Econometrics 9411002, EconWPA.
  4. Martin Feldstein & James M. Poterba, 1984. "Unemployment Insurance and Reservation Wages," NBER Working Papers 1011, National Bureau of Economic Research, Inc.
  5. repec:att:wimass:9525 is not listed on IDEAS
  6. Lancaster, Tony & Chesher, Andrew, 1983. "An Econometric Analysis of Reservation Wages," Econometrica, Econometric Society, vol. 51(6), pages 1661-76, November.
  7. Das, J.W.M. & Donkers, A.C.D., 1997. "How Certain are Dutch Households about Future Income? An Empirical Analysis," Discussion Paper 1997-38, Tilburg University, Center for Economic Research.
  8. Jeff Dominitz, 1998. "Earnings Expectations, Revisions, And Realizations," The Review of Economics and Statistics, MIT Press, vol. 80(3), pages 374-388, August.
  9. Lippman, Steven A & McCall, John J, 1976. "The Economics of Job Search: A Survey," Economic Inquiry, Western Economic Association International, vol. 14(3), pages 347-68, September.
  10. Charles F. Manski, 1993. "Adolescent Econometricians: How Do Youth Infer the Returns to Schooling?," NBER Chapters, in: Studies of Supply and Demand in Higher Education, pages 43-60 National Bureau of Economic Research, Inc.
  11. Horowitz, Joel L. & Manski, Charles F., 1998. "Censoring of outcomes and regressors due to survey nonresponse: Identification and estimation using weights and imputations," Journal of Econometrics, Elsevier, vol. 84(1), pages 37-58, May.
  12. Charles T. Clotfelter & Michael Rothschild, 1993. "Studies of Supply and Demand in Higher Education," NBER Books, National Bureau of Economic Research, Inc, number clot93-1.
  13. F. Thomas Juster, 1966. "Consumer Buying Intentions and Purchase Probability: An Experiment in Survey Design," NBER Books, National Bureau of Economic Research, Inc, number just66-2.
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