August 2012
Self-perceived job insecurity across Europe over time – does changing context
matter?
- Preliminary version: Please do not cite –
Abstract
Job insecurity – in terms of an employee’s evaluation of the continuity in a current job – displays a
high variety across European countries, wherefore previous research has mainly focused on the
impact of labour market conditions and welfare state institutions. This paper adds to the existing
research in several ways: First, it focuses on two cognitive components separately – namely the selfperceived likelihood and the self-perceived severity of job loss. Second, this study expands the range
of context determinants by the past development of the labour market and welfare state
interventions. I argue that not the current state of the labour market and welfare state institutions
alone, but also recent changes of this context are relevant for individual’s evaluation of job
insecurity. And third, this study examines how the link between welfare state institutions and the
individual’s perception of job insecurity varies under changing labour market conditions. Relying on
data from the 2nd and 5th Round of the European Social Survey and contextual information provided
by the OECD, multilevel analyses are conducted. The results reveal that the past development of the
labour market and changes in the welfare state interventions contributes to explain individual’s
perception of job insecurity. In addition, it became apparent that the link between the welfare
institutions and the subjective job insecurity depends on the development of the labour market. The
findings represent a promising starting point for further research.
Contact
Dipl.-Soz. Christiane Lübke1
Institute of Sociology
University of Duisburg-Essen
47057 Duisburg, Germany
christiane.luebke@uni-due.de
1
The author would like to thank Marcel Erlinghagen for very helpful comments and suggestions.
1
Introduction
The changing nature of the labour market has received particular attention from researchers and the
general public. A large part of discussion deals with the growing deregulation and flexibility of labour
markets in Europe that lead to a spread of precarious labour forms such as part-time work, fixedterm contracts and temporary agency employment (Kalleberg, 2000). Whereas some interpret this
trend as an expression of the erosion of the standard employment relationship (e.g., Castel, 2000),
others emphasise the persistent stability of European labour markets (e.g., Auer & Cazes, 2000;
Erlinghagen & Knuth, 2004).
Irrespective of this debate, great attention deserves the fact that self-perceived job insecurity – in
terms of an employee’s evaluation of the continuity in a current job – is widely spread under
changing labour market conditions and welfare institutions in Europe (e.g., Böckerman, 2004;
Erlinghagen, 2008; OECD, 1997). To direct the focus towards self-perceived job insecurity is of
particular relevance as research frequently has shown that the perception of job insecurity – and not
only objective insecurity itself – is associated with detrimental consequences for individuals, namely
reduced well-being (e.g., Drobnic et al., 2010), health impairments (e.g., László et al., 2010), and a
large range of personal and family problems (e.g., Larson et al., 1994). Furthermore, researchers have
pointed out the consequences for the economy as self-perceived job insecurity is also related to a cut
of consumer and household spending (e.g., Benito, 2006).
Against this background, a remarkable research strand evolved which examines the determinants of
self-perceived job insecurity (e.g. Anderson & Pontusson, 2007; Chung & van Oorschot, 2011; Clark &
Postel-Vinay, 2008; Erlinghagen, 2008). As self-perceived job insecurity displays a considerable
variation across European countries (e.g., OECD, 1997), the main focus of these studies is the
country-specific context as a determinant of individual’s perception of job insecurity. A main source
of this variation is supposed to be the correspondingly different opportunity structure of the labour
market. It determines both the stability of existing jobs and the availability of job vacancies. Thus, the
labour market is the most obvious source of perceived job insecurity. In addition to the labour
market, the interventions by the welfare state are regarded as being crucial for the perception of job
insecurity. Through its institutions the welfare state has the possibility to enhance or constrain the
perception of labour market risks. However, the empirical evidence is not that clear and satisfactory
as one would expect. First of all, very few studies have been able to detect significant associations
between context indicators and the perception of job insecurity at the individual level in multivariate
analysis (e.g. Anderson & Pontusson, 2007; Chung & van Oorschot, 2011; Clark & Postel-Vinay, 2008;
Erlinghagen, 2008). And second, those findings that exist are to some extent contradictory. For
example, Chung and van Oorschot (2011) could prove that the economic growth is significant
associated with the level of job insecurity, whereas Erlinghagen (2008) found no such significant
2
relationship with the economic growth. Up to now, the question of how the context shapes
individual's perception of job insecurity still remains largely unanswered.
Addressing this question, this paper adds to the existing research by focusing on the changing
context as the crucial determinant of self-perceived job insecurity. I will argue that not the current
state of the labour market and welfare state institutions alone, but also recent changes of this
context are relevant for individual’s evaluation of job insecurity. People form their option about their
job insecurity by evaluation their environment – as a reference serves their past experience. With
regard to the labour market, this can easily be understood: Studies (e.g., Erlinghagen, 2008) which
consider for instance the level of unemployment suppose that people react to labour market
conditions. They assume that the punctual indicator reflects the economic circumstances. However,
the current situation is the result of a declining or increasing overall development which is the basis
of employee’s perception of developments in the near future. Therefore, this study takes additionally
the past development of the labour market into account.
Also the role of welfare state institutions must be considered from the angle of changing context.
First, institutions can be a determining factor itself as people evaluate their effectiveness. A change in
welfare state interventions can create insecurity when employees are not satisfied with the change
or when it is not yet possible for them to evaluate the new arrangement. Thus, this study takes a
closer look at the association between the change in welfare interventions and the individual
perception of job insecurity in European countries. In addition, institutions can play a mediating role
and buffer the consequences of labour market risks. This may, however, be the case only under
specific labour market conditions. This is why this study examines in a further step the impact of
institutions on individual’s perception of job insecurity under changing labour market conditions.
The paper proceeds as follows: At first, I outline the applied multidimensional approach of selfperceived job insecurity. This study distinguishes between the self-perceived likelihood and the
severity of job loss. As both are distinct components of the overall concept of job insecurity, I expect
them to be differently related to the context. Based on previous research, I focus then on the
determinants of self-perceived job insecurity. In particular the relevance of the opportunity structure
of the labour market and the interventions by welfare state institutions will be discussed. Relying on
data from the 2nd and 5th Round of the European Social Survey, the empirical section starts with a
descriptive overview of the scope and development of self-perceived job insecurity in 2004 and 2010
in Europe. Thereafter, multilevel logistic regression models are presented in order to test the
influence of the changing context.
3
A multidimensional approach of self-perceived job insecurity
This study is based on a multidimensional approach of self-perceived job insecurity which takes
account of the current state of research on this issue. The foundation was laid by Greenhalgh and
Rosenblatt (1984, p. 438) who defined job insecurity as the “perceived powerlessness to maintain
desired continuity in a threatened job situation”. Other researchers build upon their work and
defined job insecurity in similar ways (for an overview see Sverke & Hellgren, 2002).
A common feature of these definitions is the aspect of subjectivity which implies that individuals
perceive and evaluate their environment to form their expectations concerning their future job
situation. The base of this evaluation process is an apparently objective reality. Job insecurity,
however, is neither foreseeable nor objectively measurable. Approaches that attempt to detect job
insecurity through objective indicators (such as the type of employment contract) overlook the fact
that it heavily depends on the individual's perception of their situation. Recent research has indicated
that apparently objective insecure job situations do not necessarily lead to subjective job insecurity
(Klandermans et al., 2010). In turn, it is also true that not all kind of subjective insecurity can be
attributed to a detectable objective reality (Rosenblatt & Ruvio, 1996).
Apart from the subjective character, previous research often emphasised the multidimensional
nature of job insecurity (e.g., Hellgren et al., 1999). The most common distinction is made between
the affective and cognitive dimension, the latter will be studied here. Cognitive job insecurity
addresses the perceived eventuality of an incident associate with job loss. The cognitive dimension is
a necessary, but not a sufficient condition for affective job insecurity which captures the (negative)
feelings concerning the continuity in a current job (Borg & Elizur, 1992). Individuals take at least two
different components into account to form their affective job insecurity: the likelihood and the
severity of a potential job loss. The self-perceived likelihood is a cognitive perception of the
occurrence probability of losing the current job. The term self-perceived severity of job refers to the
perceived consequences of a job loss which are best represented by the perceived difficulties to find
a new job in case of unemployment. In my analysis, I focus on these two cognitive components and
study them separately. More precisely, I distinguish between the self-perceived likelihood and the
self-perceived severity of job loss (as also suggested by Klandermans & van Vuuren, 1999).
The multidimensional nature of subjective job insecurity has mostly been neglected by researchers
(Huang et al., 2010, p. 22). Most studies examine either cognitive (Erlinghagen, 2008) or affective job
insecurity (Chung & van Oorschot, 2011). The difference of these components is rarely made clear –
with the exception of Anderson and Pontusson (2007). However, it is essential to be aware of these
differences as recent research provided support for the plausible view that both components are
separate in terms of determinants and consequences (e.g., Klandermans et al., 2010; Sverke et al.,
2002).
4
Determinants of self-perceived job insecurity
As outlined above, self-perceived job insecurity is based on a individual perception and evaluation
process. The threat of job loss is not readily visible, individuals therefore rely on sources of
information that they believe are indicating the objective job insecurity. While Greenhalgh and
Rosenblatt (1984) only have mentioned types of information that are related to the immediate
organizational context, recent research has expanded that view by emphasizing the importance of
context factors as determinants of self-perceived job insecurity. Individuals are embedded in a
broader context which provides comprehensive information for employees to form their
expectations about their job insecurity (Erlinghagen, 2008). In the following I will focus on two types
of context factors – namely on the opportunity structure of the labour market and on the
interventions by welfare state institutions.
Opportunity structure of the labour market
The labour market represents the opportunity structure for individuals. On the one hand, the stability
of existing jobs depends on the economic conditions in a country. On the other hand, the labour
market determines the availability of job vacancies. In other words, the labour market constitutes the
objective framework of job insecurity. Employees may perceive this framework through various
channels. As research has no access to these, empirical studies mostly rely on context indicators such
as the unemployment rate or the economic growth to measure the opportunity structure.
Only few studies have been able to detect significant associations between the labour market
context and the perception of job insecurity at the individual level (e.g. Anderson & Pontusson, 2007;
Chung & van Oorschot, 2011; Clark & Postel-Vinay, 2008; Erlinghagen, 2008). However, a comparison
of these studies is difficult as they rely on both different concepts of self-perceived job insecurity and
varying indicators of the labour market context. Anderson and Pontusson (2007), for example, have
found that the unemployment rate (measured as 5-year average and the change compared with the
previous year) is positively related to the cognitive dimension (which is similar to the likelihood
component studied here) as well with the labour market insecurity (similar to the severity
component). Erlinghagen (2008) has confirmed this relationship for the long-term unemployment
rate and the likelihood component of self-perceived job insecurity. Mau et al. (2012) have found no
significant effect of the unemployment rate; however, their dependent variable is an additive scale of
socio-economic insecurity.
The economic condition of a country is mostly captured by the gross domestic product (GDP; in
differing operationalization, again). Erlinghagen (2008) has found no signs for an association between
GDP growth and level of job insecurity. In contrast, Chung & van Oorschot (2011) have tested two
indicators of the economic conditions. The one-year growth rate exhibits a positive relationship
suggesting that countries with a low economic growth experience a higher amount of people how
5
feel insecure about their job. However, the average growth rate (over last 5 years) implies the
opposite. The authors assume that these results may be attributed to other factors lying behind the
economic condition (Chung & van Oorschot, 2011, p. 296).
One point that has so far only been implied, but not systematically investigated is the role of
changing conditions. Indicators such as the unemployment rate or GDP are only snapshots of the
current state of the economy; they do not contain any information of the past development. A hint
for the independent relevance of the changing context has been provided by Chung & van Oorschot
(2011) who have found a significant correlation between the changes in unemployment rate
compared with previous year and individual’s perception of job insecurity under control of current
level of unemployment. Building on this, I argue that the basis of the individual evaluation process is
not only the one-time snapshot, but that also the past development of the labour market shapes
individual's perception of job insecurity.
The stated importance of the past development for the perception of job insecurity derives mainly
from the following considerations: First of all, any improvement or decline in the economy can be
interpreted as an indicator for further development as it may be assumed that a trend will continue
(Anderson & Pontusson, 2007, p. 222). The current state of economy – weather measured by the
unemployment rate or GDP growth – does not say anything whether it is the result of a declining or
increasing development. Secondly, it can be assumed that people are aware of changes. As known
from the social learning theory, individuals tend to put information they get into relation to their
knowledge and past experience. How they evaluate the current situation heavily depends on the
experience individuals have with this kind of situation (Anderson, 1995, p. 117ff.). Therefore, it may
be suggested that in countries with a constant high unemployment rate, employees may learn – or
adapt to – this and know from their experience that the high rate does not necessarily mean they
have to be concerned about their jobs. Changes, however, may require a (re-)evaluation of the
situation and thus can create insecurity, especially changes toward more unfavourable conditions.
To sum up, I expect that in countries with a prosperous development regarding the labour market
individuals are less likely to perceive job insecurity as in countries with a threatening development.
This relationship is supposed to be independent of the current state of the labour market. In
addition, I expect that both components of self-perceived job insecurity are related to the changing
context as both are based on an evaluation process.
6
Interventions by the welfare state institutions
Employees are not fully unprotected exposed to the risks of the labour market. The interventions by
the welfare state aim – although to different degrees – to protect employees against market forces.
From the perspective of the employees, welfare state institutions may have a signalling effect. Based
on their knowledge, individuals take the interventions by the welfare state into account when they
form their opinion about their future job insecurity. In particular, employees judge the effectiveness
of the welfare state to protect them against layoffs and support them in case of unemployment.
There are two key types of welfare state interventions: On the one hand, the welfare state acts
through social expenditures. Individuals may learn about the generosity through services and social
transfers they use or may use in case of unemployment. On the other hand, the welfare state
intervenes through regulations of the labour market. When it comes to job insecurity, the
employment protection legislation is probably the major intervention as it determines the costs of
firing.
In order to confirm the expected association between the welfare state and self-perceived job
insecurity at the individual level, previous research has focused on context indicators representing
these types of interventions such as social expenditure and employment protection index. But again,
the empirical findings are rather weak. For example, Erlinghagen (2008) has found no significant
association – neither with the social security spending nor with the employment protection level.
Chung and van Ootschot (2011) have been able to find significant effects of social expenditure (both
active and passive labour market policies). However, they conclude from their further analysis that
institutional factors lose their direct impact on individual’s perception when differences in the labour
market are considered.
To get a deeper understanding of the relationship between welfare state interventions and the
perception of job insecurity, I considered institutions from two angles: In a first step, the analysis
focuses on the change of institutional interventions itself. It is asked whether changes in social
expenditure or labour market regulations create insecurity for employees. Alike to the development
of the labour market, individuals should be aware of changes in the welfare state. Hence, I assume
that individuals respond to cutbacks in interventions by the welfare state with increased job
insecurity. Vice versa, an expanding level of interventions reduces the self-perceived insecurity. This
should prove to be independent of the current level of social expenditure. In relation to the labour
market regulation, I argue that a relaxation of the protection against dismissals is associated with an
increase in job insecurity. The opposite should be true for an increase of protection strictness in a
country.
It is important to note here that this study is not able to test the impact of what might be called
social and policy shocks. In the last decade, most European countries introduced welfare reforms
7
initiated by a paradigm shift towards an “activating state” (Dingeldey, 2007). These may have caused
changes that are not necessarily represented by context factors used in this study. Examining the
long-term development of job-insecurity in Germany, Erlinghagen (2010) has assumed that the social
reform introducing the so called Hartz IV legislation triggered a public debate which in turn initiates
an increase in subjective insecurity which cannot be regarded as objectively justified.
In a second step, welfare institutions are examined under changing labour market conditions. As
institutions moderate the conditions of the labour market, I argue that their influence depends on
the development of the labour market. In other words, the relationship between subjective job
insecurity and interventions of welfare state institutions is moderated by the conditions of the labour
market. As already stated, people seem to be aware of the generosity of the welfare interventions;
however, this may be without any high significance in times of good or at least constant labour
market conditions. It is of importance if people need to fear that they will be dependent on welfare
state interventions such as social benefits. For example, this may be the case under worsening labour
market conditions. Thus, I propose the following hypothesis: In times of worsening labour market
opportunity structures more regulating and more generous interventions by the welfare state
institutions milder insecurity more than in more favourable economic situations.
8
Data and measurements
Data
Data from the European Social Survey (ESS) are used which is designed to monitor attitudes, beliefs
and behaviour patterns of Europe’s population (European Social Survey, 2012). Since 2002, the ESS
has been conducted every other year with rotating modules to cover a wide range of topics. The
repetition of modules, or parts of them, creates new opportunities for longitudinal research. Taking
advantage of this, I use data of the 2nd Round (conducted in 2004/2005) and 5th Round (conducted in
2010/2011) which contain questions on self-perceived job insecurity.
The ESS covers over 30 countries, whereas this study focuses on the 19 countries that took part in the
2nd as well as 5th Round. Due to missing context data, Switzerland and Ukraine are omitted from the
analysis. Altogether the analysis includes Belgium, Czech Republic, Denmark, Estonia, Finland, France,
Germany, Greece, Hungary, Ireland, Netherlands, Norway, Poland, Portugal, Slovakia, Slovenia, Spain,
Sweden, and United Kingdom.
Since I am interested in the self-perceived job insecurity of employees, the sample is restricted to
dependent employees between 20 and 67 years of age at the time of interview. Conversely, this
means that self-employed workers and non-working individuals are not considered. After the
exclusion of cases with missing values for the dependent variables, there are 24,693 individuals
remaining for the analysis of the likelihood of job loss; and 24,093 individuals for the analysis of the
severity of job loss. In each case the individuals are nested within the 19 countries.
Measurements of self-perceived job insecurity
The perceived likelihood of job loss is measured by the following question: “Please tell me how true
each of the following statements is about your current job. My job is secure.” Predefined answers are
“not at all true”, “a little true”, “quite true” and “very true”. According to the operationalization a
person perceives a high likelihood of job loss when he/she rejects this statement with “not at all
true”. Individuals stating something different constitute the reference.
To assess the self-perceived severity of job loss, which is the second component of subjective job
insecurity, respondents were asked: “How difficult or easy would it be for you to get a similar or
better job with another employer if you had to leave your current job?” The wording of this question
in Round 5 is slightly different from the formulation in Round 2. In 2004, it is asked how difficult or
easy would it be for you to get a similar or better job with another employer if you wanted to? The
answer of both questions was recoded on an eleven-point scale, with 0 indicating “extremely
difficult” and 10 “extremely easy”. To keep the limitation due to the difference in wording small, a
strict operationalization is applied. The question is dichotomized as I summarize respondents who
choose 0 or 1 as individuals perceiving a job loss as severe, the others constitute the reference.
9
Description of the context variables
The analysis includes centred variables representing the current state as well as the past
development of the following context indicators.

I use the gross domestic product per head (GDP/1000 in US $, current prices) as global indictor of
the power of economy in a country at the present year (prepared by OECD, 2011). The change is
measured by the average of the yearly changes of GDP per head over last three, five and ten
years up to the year of survey.

The unemployment rate (from OECD, 2011) reflects the share of unemployed individuals of the
civilian labour force. For each country, I introduce the national unemployment rate for the year
of survey. The development of the unemployment rate is measured by the average of the yearly
changes in unemployment over the last three, five and ten years up to the year of survey.

The national average of job tenure (expressed in months) measures the average of job durations
with the current employer in a country (own calculations on the basis of European Labour Force
Survey, Eurostat, 2010).
The following centred variables are used to represent the current state as well as the past
development of the interventions by welfare state institutions.

The value of public social spending (as a % of GDP) stands for the generosity of the welfare state
interventions (prepared by OECD, 2011). To measure the change, variables are generated by
calculating the average of the yearly changes of social spending over the last three, five and ten
years.

The indicator net unemployment replacement rate (assembled by van Vliet & Caminada, 2012)
measures the proportion of income which is replaced by welfare transfers in case of
unemployment. I use the net replacement rates for an average one-earner couple with two
children in the initial phase of unemployment. Most recent data are available for 2009 which
replace the missing data of 2010.

The strictness of the employment protection legislation (EPL) is captured by the index provided
by the OECD (2011). Recent data are available for 2009 which replace the missing data of 2010.
The change in this indicator is captured by two dummies, indicating whether there was a
decrease or increase of EPL in the last 5 years.
Additionally, a large array of determinants at the individual level is included which have been proven
to be relevant for the individual's perception of job insecurity (for details see Table 7 in Appendix).
10
Descriptive findings
In a first step, descriptive findings are presented in order to gain an impression of the level and
development of self-perceived job insecurity. Thereby, the two components of job insecurity will be
considered separately: In Table 1, I examine the perceived likelihood of job loss which is represented
by the percentage of individuals perceiving their current job as insecure. In Table 2, the selfperceived severity of job loss is displayed by the share of individuals who perceive a job loss as severe
in terms of reporting expected difficulties in finding a new job, if they had to.
Table 1 Level and dynamics of perceived likelihood of job loss across Europe in 2004 and 2010
Country
Ireland
Greece
Czech Republic
Hungary
Portugal
United Kingdom
Slovakia
Spain
Slovenia
Denmark
Netherlands
Belgium
France
Finland
Sweden
Germany
Norway
Estonia
Poland
Percentage of individuals
perceiving their job as insecure
2004
2010
9.1
20.5
25.6
36.5
21.8
32.0
11.8
18.0
11.0
15.8
10.2
14.7
45.3
48.5
11.1
13.7
7.1
9.5
9.6
10.0
13.1
13.3
11.3
10.1
26.1
23.7
10.2
7.7
10.7
7.9
15.5
10.8
9.5
4.4
8.9
3.3
21.5
13.6
Change
of perceived likelihood of job loss
2004 to 2010
11.4
10.9
10.2
6.2
4.8
4.5
3.2
2.6
2.4
0.4
0.2
-1.2
-2.4
-2.5
-2.8
-4.7
-5.1
-5.6
-7.9
Min.
7.1
3.3
Max.
45.3
48.5
Mean
16.1
15.8
Source: ESS 2 and ESS 5 (weighted), own calculations.
As shown in Table 1, there is both a great variation between countries and over time within single
countries. In the year 2004, the share of employees who perceive their job as insecure ranges from
7.1 % in Slovenia to 45.3 % in Slovakia. Whereas Slovakia maintains its position with the highest share
of people that feel insecure, the rest of the ranking greatly alters. The largest variations occur in
Ireland, Greece and Czech Republic, where the share of insecurity increased by more than 10
percentage points. Whereas Greece and Czech Republic belong also 2004 to the countries with a
relative high share of job insecurity, Ireland starts from a relatively low level. At the other end, a
decline can be seen in Poland, Estonia and Norway. Poland stands out as it started from a high level
of insecurity. Hardly any change occurs in Denmark, the Netherlands and Belgium. The share across
11
all countries is slightly declining, while the range between the minimum and maximum value expands
comparing 2004 and 2010.
Table 2 shows the level and development of the severity component of self-perceived job insecurity
across Europe in 2004 and 2010. Again, a great variation between countries as well as over time
within single countries is displayed.
Table 2 Level and dynamics of self-perceived severity of job loss across Europe in 2004 and 2010
Country
Ireland
Spain
United Kingdom
Estonia
France
Denmark
Finland
Sweden
Portugal
Hungary
Norway
Slovenia
Netherlands
Greece
Germany
Belgium
Slovakia
Czech Republic
Poland
Percentage of individuals
perceiving job loss as severe
2004
2010
9.3
23.3
17.6
9.6
10.7
5.9
23.0
21.3
13.9
12.9
11.5
10.8
12.1
11.4
9.1
10.6
13.5
15.1
37.0
40.4
3.8
7.5
19.2
23.0
11.4
15.2
37.6
41.5
23.3
28.4
11.8
17.2
17.0
22.8
18.3
28.8
15.0
34.4
Change
of perceived severity of job loss
2004 to 2010
14.0
8.0
4.8
1.7
1.0
0.7
0.7
-1.5
-1.6
-3.4
-3.7
-3.8
-3.8
-3.9
-5.1
-5.4
-5.8
-10.5
-19.4
Min.
5.9
3.8
Max.
41.5
37.6
Mean
18.3
16.7
Sources: ESS 2 and ESS 5 (weighted), own calculations.
Overall, the share of people who perceive a job loss as severe declined from 2004 to 2010,
accompanied by a decline of maximum and minimum value. The largest decrease, with a reduction of
more than 10 percentage points, can be seen in Czech Republic and Poland. Both countries, however,
remain at a high level of self-perceived severity of job loss. The largest increases can be seen in
Ireland where the share of people who perceive a job loss as severe grew by 14 percentage points
from 2004 to 2010. Countries like Denmark, Finland and Sweden have hardly experienced any change
between 2004 and 2010.
Setting the change of both components in relation to each other reveals that in most countries the
development of the share of people perceiving a job loss as likely and severe goes in the same
direction. One interesting exception is Czech Republic where the shares of people perceiving job loss
as likely decrease by 10.2 per cent points, at the same time the share of people perceiving a job loss
as severe increase by 10.5 per cent points. It is further notable that countries with the highest share
12
of people perceiving job loss as likely are not necessarily the countries with the highest share of
people perceiving job loss as severe (see for example Slovenia and Estonia).
The descriptive overview stresses, on the one hand, the distinction of both components and, on the
other hand, the dynamics of self-perceived job insecurity across Europe over time. From another
related perspective, the role of changing context on the perception of job insecurity is now
examined.
Multivariate findings
The relationship between individual’s perception of job insecurity and the (changing) context is
assessed by multilevel logistic regression analyses. To capture the two-level structure of the data
(individuals nested in countries) adequately, multivariate analyses are performed applying two-level
random intercept models (Rabe-Hesketh & Skrondal, 2008). Table 3 shows the results for the
individual determinants of the two components of self-perceived job insecurity.
Table 3 Individual determinants of self-perceived job insecurity in Europe
Likelihood of job loss
Model 3-1
Model 3-2
Variable
B
SE
B
SE
Interview in 2002
-.087*
.039
20–29 years old
-.443***
.064
30–39 years old
-.185***
.049
55–67 years old
-.137*
.066
Female
.074
.041
(Very) good health status
-.322***
.045
Job tenure
-.044***
.007
Job tenure squared
.000***
.000
Part-time employment
-.141*
.055
Fixed-term contract
1.089***
.051
Unemployed in last 5 years
.634***
.056
Unemployed but not
.300***
.052
during the last 5 years
Contributes > 50 %
-.028
.041
to household income
Child lives at household
-.043
.042
Constant
-1.851***
-1.442***
ICC
.107
.114
n (individuals)
24693
24693
n (countries)
19
19
Note: Pooled data from ESS 2 and ESS 5; own calculations.
*p < .05. **p < .01. ***p < .001.
Severity of job loss
Model 3-3
Model 3-4
B
SE
B
SE
.239***
.036
-.533***
.068
-.366***
.048
.549***
.052
.230***
.038
-.350***
.040
.027***
.006
-.000
.000
.010
.050
.233***
.056
.442***
060
.340***
.048
-1.623***
.100
24093
19
.030
.038
.040
.039
-2.028***
.112
24093
19
Multilevel analyses typically start with an empty model without covariates to get an idea of the
extent to which the variation in the dependent variable is attributed to the context. In the present
analysis, the first and third model in Table 3 can be used to estimate the between-country variance of
the self-perceived likelihood of job loss (model 3-1) and of the self-perceived severity of job loss (3-3)
using the intra-class correlation coefficients (ICC). The ICC of the likelihood component amounts
0.107 and thus almost 11 % of the variance of this component of job insecurity across individuals can
13
be attributed to the country level. The variance of the severity of job loss is slightly lower: 10 % of the
variance of this component of job insecurity across individuals is attributed to the country level. In
both cases, the individual variables, which are introduced in the following, do not contribute to
explain the variance between countries.
Determinants at the individual level (introduced in model 3-2 and 3-4) serve as control variables and
will not be discussed in detail. However, it can be stated that all effects are as expected on the basis
of previous literature. Having a fixed-term contact and past unemployment experiences is positively
associated with individual’s perception of job insecurity, whereas mainly a young age and a (very)
good health status are negatively related to both components of job insecurity.
Interestingly, several individual determinants are differently associated with the two components of
self-perceived job insecurity. Older employees, who are between 55 and 67 years of age, perceive a
job loss as less likely than the reference group of individuals between 40 and 54 years of age.
However, older employees are more affected by the concern to find a new job in case they have to.
This may reflect the comparatively poor prospects in the job market for older employees, but also
their comparable secure jobs due to seniority advantages. A similar feature can be seen for women:
While women do not differ from men in their perception of the likelihood of job loss, women are
more exposed to perceive a job loss as severe. Again, this may be due the segmented labour market
which, however, applies only to new job searches.
Furthermore, the relationship between job tenure and both components of job insecurity differs. In
contrast to the self-perceived likelihood of job loss, the probability of perceiving a job loss as severe
significantly increases with job tenure. It can be supposed that with increasing job tenure the firmspecific skills increase and that these skills in turn protect employees against layoffs (at least up to a
certain point as the relationship is u-shape). At the same time, the firm-specific skills may make
employees unattractive for other employers. Individuals seem to be aware of this relationship as they
perceive a job loss as more severe the longer they work for the current employer.
The examination of determinants at the individual level already reveals several hints about the
nature of both components of job insecurity. In particular, there are strong evidences that the
perception of the likelihood and the severity of job loss are differently related to certain factors.
Keeping these findings in mind, the focus is now directed to the determinants at the context level –
whereby the individual determinants remain as control variables in the analysis.
In Table 4 the results from separate multilevel logistic regression models for the perception of the
likelihood and the severity of job loss are arranged side by side. In the first three rows, the presented
models contain each one variable indicating the current opportunity structure of the labour market.
The change of context is addressed by a set of three variables, representing the short-, medium-, and
14
long-term development of the same context indicator. The separate models are further controlled
for the current level of this indicator as presented in related model 4-1, 4-2, and 4-3. In addition, all
models are controlled for individual level variables consistent with model 3-2 (respectively 3-4) in
Table 3.
Table 4 Impact of changing opportunity structure of the labour market on self-perceived job
insecurity in Europe (results from separate multilevel logistic regression models)
Model
4-1
Opportunity structure of the labour market (at present year)
Current GDP per head (divided by 1000)
4-2
Current unemployment rate
4-3
Current national average of job tenure
4-4
Past development of economic growth
Average of changes in GDP per head in last 3 years1
4-5
Average of changes in GDP per head in last 5 years1
4-6
Average of changes in GDP per head in last 10 years1
4-7
Past development of unemployment rate
Average of changes in unemployment in the last 3 years2
4-8
Average of changes in unemployment in the last 5 years 2
4-9
Average of changes in unemployment in the last 10 years 2
Likelihood of job
loss
B (SE)
Severity of
job loss
B (SE)
-.794***
(.168)
.176***
(.037)
.482***
(.103)
-.718***
(.122)
.321***
(.032)
.557***
(.103)
-.066
(.058)
-.248**
(.090)
-.083
(.201)
-.295***
(.048)
-.424 ***
(.080)
-.945***
(.164)
-.018
(.037)
.113
(.099)
-.292*
(.090)
-.007
(.031)
.010
(.086)
.233**
(.074)
Past development of national average of job tenure
4-10 Average of changes in national job tenure in last 3 years3
-.003
.074***
(.015)
(.014)
4-11 Average of changes in national job tenure in last 5 years3,4
.081**
.078**
(.026)
(.026)
4-12 Average of changes in national job tenure in last 10 years3,4
.052
.190**
(.061)
(.057)
Note: Pooled data from ESS 2 and ESS 5. Each model contains control variables at the individual level –
consistent with model 3-1 (respectively 3-3). 1Models are controlled for current GDP per head. 2Models are
controlled for current unemployment rate. 3Models are controlled for national average of job tenure. 4Due to
missing context data, the 2004 sample of Slovakia is excluded.
*p < .05. **p < .01. ***p < .001.
The results in the first three rows of Table 4 confirm the expected associations between the present
opportunity structure of the labour market and the individual’s perception of job insecurity. The
current GDP per head is significant negatively related with both components of job insecurity. That
supports the idea that a good economic condition in a country reduces individual’s concerns about
job insecurity. Pointing in the same direction, high unemployment rate increases job insecurity as
there is a positive association between the current unemployment rate and self-perceived job
insecurity. The current national average of job tenure is a measurement of job stability. The positive
15
relationship, however, may reflect the fact that in times of dismissals and downsizing the national job
tenure increases by the nature of this indicator. Contrary to expectations, there are no differences
between the determinants of both components of job insecurity. This may demonstrate that the
current state of the labour market reflects the overall framework of job insecurity. But how do
individuals evaluate changes in the labour market?
My expectation is that not only the current state, but also the past development of the labour market
shapes the individual’s perception of job insecurity in a country. This is to a large extent supported by
the results. There is a negative relationship with the past development of economic growth which is
significant for the medium-term development in the model of the likelihood component, and for all
three indicators in the models of the severity component (models 4-4, 4-5, and 4-6). This suggests
that as people perceive economic growth they are more optimistic about future prospects –
independent of the current value of the GDP (as the models are controlled for the current GDP per
head).
A significant association between the past development of unemployment rate and the selfperceived job insecurity can be seen only for the long-term development (model 4-9). Interestingly,
this association differs in direction between the two components. The likelihood of job loss is
negatively associated with the development of unemployment rate suggesting that with an increase
in unemployment rate the concerns about the future of the current job decline. The reason for that
contra-intuitive relationship may be a kind of selection and learning process. Insecure jobs are
degraded first in times of increasing unemployment. At the same time employees who remain in
employment may experience that their jobs are quite stable and stay therefore optimistic about the
future of their job. A reverse relationship exists between the long-term development of
unemployment in a country and the individual’s perception of the severity of job loss. Along with a
rising unemployment in the last ten years, the perceived severity of job loss increases. The rise in
unemployment may be interpreted by employees as a worsening of labour market opportunities.
The rise in national job tenure is positively associated with both components of self-perceived job
insecurity whereas for the likelihood component the effect is only significant for the medium-term
indicator (model 4-10, 4-11, and 4-12). The increase of national job tenure may be a sign for job
stability and therefore may be perceived as decrease in insecurity. This is at least for the severity
component surprising as a (short-term) increase in national job tenure can also be a sign of a closure
of the labour market.
After addressing the role of changing labour market conditions, the analysis proceeds with the
impact of changing interventions by welfare state institutions on self-perceived job insecurity in
Europe. Table 5 has the same structure as the previous table: The results from separate multilevel
logistic regression models for the two components of job insecurity are arranged next to each other.
16
This time, variables indicating the interventions of the welfare state are considered. In the first three
rows, the current state of these indicators at the year of survey is taken into account (model 5-1, 5-2,
and 5-3). In the other rows, variables are introduces which are designed to reflect the change in
welfare state institutions (model 5-4 to 5-10). Again, all models are controlled for individual
determinants consistent with model 3-2 (respectively 3-4) in Table 3 and the current state of this
indicator.
Table 5 Impact of changing interventions by welfare state institutions on self-perceived job
insecurity in Europe (results from separate multilevel logistic regression models)
Likelihood of job
loss
B (SE)
Model
5-1
Interventions by welfare state institutions (at present year)
Current public social spending (as a % of GDP)
5-2
Current net unemployment replacement rate
5-3
Current EPL
5-4
Past development of public social spending
Average of changes in public social spending in last 3 years1
5-5
Average of changes in public social spending in last 5 years1,3
5-6
Average of changes in public social spending in last 10 years 1,3
Past development of unemployment replacement rate
Average of changes in net unemployment replacement rate
in last 3 years2
5-8 Average of changes in net unemployment replacement rate
in last 5 years2
5-9 Average of changes in net unemployment replacement rate
in last 10 years2
Past development of EPL4
5-10 Increase of EPL in last 5 years (Ref.: no change in EPL)
5-7
Severity of job
loss
B (SE)
.145
(.078)
.567***
(.152)
-.054
(.124)
.608***
(.078)
-.092
(.107)
-.135
(.125)
-.164
(.085)
-.214
(.111)
-.650***
(.151)
-.008
(.072)
.146
(.104)
.582***
(.139)
.111***
(.028)
.171***
(.033)
.028
(.015)
.031
(.027)
-.020
(.022)
.032*
(.014)
-.202**
-.145*
(.071)
(.072)
Decrease of EPL in last 5 years
.168**
-.160**
(.060)
(.059)
Note: Pooled data from ESS 2 and ESS 5. Each model contains control variables at the individual level –
consistent with model 3-1 (respectively 3-3). 1Models are controlled for current public social spending (as a %
of GDP). 2Models are controlled for current net unemployment replacement rate. 3The 2004 sample of Estonia,
Hungary and Slovak Republic are omitted due to missing context data. 4The 2004 samples of Estonia and
Slovenia are excluded due to missing context data.
*p < .05. **p < .01. ***p < .001.
The public social spending is positively associated with the self-perceived severity of job loss, but not
significant with the likelihood component (model 5-1). However, the direction of this association
should be interpreted with caution as this indicator depends on the GDP and this markedly changed
in some countries. It could be that not the increase in real social spending, but the hidden decrease
of GDP affects the self-perceived job insecurity. This expectation is confirmed by an additional model
17
in which the public social spending loses significance, but keeps the direction under control of the
current GDP (model not shown).
The current unemployment replacement rate is only significant associate with the likelihood
component (model 5-2). This suggests that also the cognitive evaluation of the stability of the current
job is somehow related to the consequences of this loss.
Turning now to the variables indicating the change of welfare state interventions: An increase in
public social spending in the long run is associated with a decreasing in self-perceived likelihood of
job loss at the individual level. For the severity component the development of social spending has
the opposite effect. An increase in public social spending – under control of the current level – is
associated with an increase in self-perceived severity of job loss. This could be due to poor labour
market opportunities that force welfare state to increase their public spending. Unfortunately, the
used variable is a rather rough indicator as it aggregates public expenditures on various social policy
areas. It therefore remains unclear what kind of public service is perceived as security-promoting
social policy.
The results concerning the development of the net unemployment replacement rate also raise
questions: A short- and medium-term increase in the replacement rate is associated with an increase
in self-perceived likelihood of job loss in a country. The same is true for the long-term development
and the severity component of job insecurity. As there is no obvious explanation for this association,
this may be traced back to other associated factors.
There is no significant association between the current EPL neither with the self-perceived likelihood
nor with the severity of job loss (model 5-3). However, the past change of EPL in a country affects the
perception of self-perceived job insecurity (model 5-10). In countries that experience an increase of
EPL in last 5 years (captured by two dummies in reference to countries with no change) individuals
are less likely to perceive the likelihood of job loss. In countries that experience a decrease of EPL the
opposite is true. There is no such consistent relationship with the severity component. For this
component, it does not matter whether the country experienced a decrease or increase. Compared
with countries without change in EPL, individuals in these countries are more exposed to this
component of job insecurity. Because the possibility to find a new job is not an everyday issue,
individuals may not be able to assess the consequences of a change in EPL for their potential job
search and therefore react with increased insecurity.
The examination revealed, on the one hand, difficulties to detect the link between the current state
of welfare interventions and the perception of job insecurity. On the other hand, it could be proven
that employees react to changes in welfare state interventions. This suggests that welfare states are
indeed an important determining factor; however, the relationship may be hidden by other
18
conditions. That is why, in a next step, I am interested in the association between the welfare state
interventions and the perception of job insecurity under changing labour market conditions. As
argued above, welfare expenditures and regulations may come into effect under certain labour
market developments.
Taking public social spending as an overall indicator of the generosity of a welfare state, I consider
interaction effects between this variable and the development of the opportunity structure of the
labour market (models not presented). Significant interaction terms for the likelihood component
suggest that the contra-intuitive positive association between the social security spending and
individuals perception of job insecurity gets stronger with increasing unemployment rate. As the
main effect, this result is not essay to explain.
A similar examination of the effect of EPL reveals the following: In contrast to my assumption, the
protective effect of the employment protection even decreases in times of worsening labour market
conditions. That fits with the opinion that the market forces seem to be the main source of job
insecurity (Chung & van Oorschot, 2011). However, there are also first hints that the link between the
welfare institutions and the subjective job insecurity depends on the development of the labour
market.
19
Conclusion
Contrary to its relevance for researchers and the general public, the issue of what makes people
concern about their job still remains largely unanswered. In particular, the high variation of selfperceive job insecurity in Europe raises the question of how the context shapes individuals
perception of job insecurity. Previous research has mainly focused on the role of labour market
conditions and welfare institutions; however, the empirical findings are not as satisfactory as one
would expect. This paper added to the existing research in several ways:
First, based on a multidimensional approach of self-perceived job insecurity, these analyses focused
on two cognitive components separately. More precisely, I distinguished between the self-perceived
likelihood and the self-perceived severity of job loss. It could be confirmed that both components of
self-perceived job insecurity are distinct dimensions as they are differently related to the context.
Second, this study expanded the range of context determinants by the past development of the
labour market and welfare state interventions. According to my argumentation, the findings suggest
that the past development of the labour market as well as of the welfare state interventions
contribute to explain individual’s perception of job insecurity. It can also be concluded that the
perception of the job loss severity is more exposed to the labour market development as the
perception of likelihood of job loss. And third, this study examined how the link between welfare
state institutions and the individual’s perception of job insecurity varies under changing labour
market conditions. Further research is necessary, but there are first hints that the link between the
welfare institutions and the subjective job insecurity depends on the development of the labour
market.
20
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22
Appendix
Table 7 Description of individual‐level variables
Interview in 2002
20–29 years old
30–39 years old
55–67 years old
Female
(Very) good health status
Job tenure
Job tenure squared
Part-time employment
Fixed-term contract
Unemployed in last 5 years
Unemployed but not during
the last 5 years
Contributes > 50 %
to household income
Child lives at household
Description
Year of interview
Ref.: interview in 2010
Age of person at time of interview
Ref.: 40–54 years old
Gender of person
Ref.: male
Self-perceived health status
Ref.: fair and (very) bad health
Job duration at current employer (in months and months2)
Working less than 35 hours a week
Ref.: Working >=35 hours a week
Type of contract
Ref.: Unlimited duration of contract
Previous unemployment experience
Ref.: no unemployment experience
Contribution to the household income
Ref.: contribution less than 50 % to household income
Household type
Ref.: no child in household
23