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- Preliminary version: Please do not cite –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 self-

perceived 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 l ink 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 SociologyUniversity of Duisburg-Essen47057 Duisburg, Germanychristiane.luebke@uni-due.de

1 The author would like to thank Marcel Erlinghagen for very helpful comments and suggestions.

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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, fixed-

term 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

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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 self-

perceived 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.

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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).

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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

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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.

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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

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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.

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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.

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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).

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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 self-

perceived 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

Percentage of individuals perceiving their job as insecure

Change of perceived likelihood of job loss

Country 2004 2010 2004 to 2010 Ireland 9.1 20.5

-7.9-5.6-5.1-4.7

-2.8-2.5-2.4

-1.20.20.4

2.42.63.2

4.54.8

6.210.210.911.4

Greece 25.6 36.5Czech Republic 21.8 32.0Hungary 11.8 18.0Portugal 11.0 15.8United Kingdom 10.2 14.7Slovakia 45.3 48.5Spain 11.1 13.7Slovenia 7.1 9.5Denmark 9.6 10.0Netherlands 13.1 13.3Belgium 11.3 10.1France 26.1 23.7Finland 10.2 7.7Sweden 10.7 7.9Germany 15.5 10.8Norway 9.5 4.4Estonia 8.9 3.3Poland 21.5 13.6

Min. 7.1 3.3Max. 45.3 48.5Mean 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

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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

Percentage of individuals perceiving job loss as severe

Change of perceived severity of job loss

Country 2004 2010 2004 to 2010 Ireland 9.3 23.3

-19.4-10.5

-5.8-5.4-5.1

-3.9-3.8-3.8-3.7-3.4

-1.6-1.5

0.70.71.01.7

4.88.0

14.0Spain 9.6 17.6United Kingdom 5.9 10.7Estonia 21.3 23.0France 12.9 13.9Denmark 10.8 11.5Finland 11.4 12.1Sweden 10.6 9.1Portugal 15.1 13.5Hungary 40.4 37.0Norway 7.5 3.8Slovenia 23.0 19.2Netherlands 15.2 11.4Greece 41.5 37.6Germany 28.4 23.3Belgium 17.2 11.8Slovakia 22.8 17.0Czech Republic 28.8 18.3Poland 34.4 15.0

Min. 5.9 3.8Max. 41.5 37.6Mean 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

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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 Severity of job lossModel 3-1 Model 3-2 Model 3-3 Model 3-4

Variable B SE B SE B SE B SEInterview in 2002 -.087* .039 .239*** .03620–29 years old -.443*** .064 -.533*** .06830–39 years old -.185*** .049 -.366*** .04855–67 years old -.137* .066 .549*** .052Female .074 .041 .230*** .038(Very) good health status -.322*** .045 -.350*** .040Job tenure -.044*** .007 .027*** .006Job tenure squared .000*** .000 -.000 .000Part-time employment -.141* .055 .010 .050Fixed-term contract 1.089*** .051 .233*** .056Unemployed in last 5 years .634*** .056 .442*** 060Unemployed but not

during the last 5 years.300*** .052 .340*** .048

Contributes > 50 % to household income

-.028 .041 .030 .038

Child lives at household -.043 .042 .040 .039Constant -1.851*** -1.442*** -1.623*** -2.028***ICC .107 .114 .100 .112n (individuals) 24693 24693 24093 24093n (countries) 19 19 19 19

Note: Pooled data from ESS 2 and ESS 5; own calculations. *p < .05. **p < .01. ***p < .001.

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

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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. I n

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 firm-

specific 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

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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)

Likelihood of job loss

Severity of job loss

Model B (SE) B (SE)Opportunity structure of the labour market (at present year)

4-1 Current GDP per head (divided by 1000) -.794***(.168)

-.718***(.122)

4-2 Current unemployment rate .176***(.037)

.321***(.032)

4-3 Current national average of job tenure .482***(.103)

.557***(.103)

Past development of economic growth4-4 Average of changes in GDP per head in last 3 years1 -.066

(.058)-.295***(.048)

4-5 Average of changes in GDP per head in last 5 years1 -.248**(.090)

-.424 ***(.080)

4-6 Average of changes in GDP per head in last 10 years1 -.083(.201)

-.945***(.164)

Past development of unemployment rate4-7 Average of changes in unemployment in the last 3 years2 -.018

(.037)-.007(.031)

4-8 Average of changes in unemployment in the last 5 years2 .113(.099)

.010 (.086)

4-9 Average of changes in unemployment in the last 10 years2 -.292*(.090)

.233**(.074)

Past development of national average of job tenure4-10 Average of changes in national job tenure in last 3 years3 -.003

(.015).074***

(.014)4-11 Average of changes in national job tenure in last 5 years3,4 .081**

(.026).078**

(.026)4-12 Average of changes in national job tenure in last 10 years3,4 .052

(.061).190**

(.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

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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 self-

perceived 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. This

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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

Severity of job loss

Model B (SE) B (SE)Interventions by welfare state institutions (at present year)

5-1 Current public social spending (as a % of GDP) .145(.078)

.608***(.078)

5-2 Current net unemployment replacement rate .567*** (.152)

-.092 (.107)

5-3 Current EPL -.054(.124)

-.135(.125)

Past development of public social spending5-4 Average of changes in public social spending in last 3 years1 -.164

(.085)-.008(.072)

5-5 Average of changes in public social spending in last 5 years1,3 -.214(.111)

.146(.104)

5-6 Average of changes in public social spending in last 10 years1,3 -.650***(.151)

.582***(.139)

Past development of unemployment replacement rate5-7 Average of changes in net unemployment replacement rate

in last 3 years2.111***

(.028).031

(.027)5-8 Average of changes in net unemployment replacement rate

in last 5 years2.171***

(.033)-.020(.022)

5-9 Average of changes in net unemployment replacement rate in last 10 years2

.028(.015)

.032*(.014)

Past development of EPL4

5-10 Increase of EPL in last 5 years (Ref.: no change in EPL)

Decrease of EPL in last 5 years

-.202**(.071).168**

(.060)

-.145*(.072)-.160**(.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

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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

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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.

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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 self-

perceive 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.

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Appendix

Table 7 Description of individual level‐ variables

DescriptionInterview in 2002 Year of interview

Ref.: interview in 201020–29 years old Age of person at time of interview

Ref.: 40–54 years old30–39 years old55–67 years oldFemale Gender of person

Ref.: male(Very) good health status Self-perceived health status

Ref.: fair and (very) bad healthJob tenure Job duration at current employer (in months and months2)Job tenure squaredPart-time employment Working less than 35 hours a week

Ref.: Working >=35 hours a weekFixed-term contract Type of contract

Ref.: Unlimited duration of contractUnemployed in last 5 years Previous unemployment experience

Ref.: no unemployment experienceUnemployed but not during the last 5 yearsContributes > 50 % to household income

Contribution to the household incomeRef.: contribution less than 50 % to household income

Child lives at household Household typeRef.: no child in household

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