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Job security perceptions and its effect on wage growth

Author

Listed:
  • James Foster

    (Reserve bank of Australia)

  • Rochelle Guttmann

    (Reserve bank of Australia)

Abstract

A concern that low job security is constraining wage growth has been expressed in many countries. In this paper, we use Australian household panel data to analyse the drivers of self-assessed job security and its relationship with wage growth. We construct measures of industry-level trade exposure and occupation-based automation risk to assess the conjecture that technological change and globalisation are leading to fears of job loss. We find that those in jobs with a higher trade exposure or automation risk or those working on a casual or fixed-term contract feel more insecure in their job. However, regardless of one’s characteristics, there has been a broad-based fall in job security in recent years that cannot be explained by the model variables. Exploiting the panel dimension of the survey, we find that heightened job insecurity has been a statistically significant but small drag on wage growth. This result is robust to various model specifications.

Suggested Citation

  • James Foster & Rochelle Guttmann, 2018. "Job security perceptions and its effect on wage growth," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 21(3), pages 229-251.
    • Handle: RePEc:ozl:journl:v:21:y:2018:i:3:p:229-251
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    References listed on IDEAS

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    1. Colin P. Green & Gareth D. Leeves, 2013. "Job Security, Financial Security and Worker Well-being: New Evidence on the Effects of Flexible Employment," Scottish Journal of Political Economy, Scottish Economic Society, vol. 60(2), pages 121-138, May.
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    3. Frey, Carl Benedikt & Osborne, Michael A., 2017. "The future of employment: How susceptible are jobs to computerisation?," Technological Forecasting and Social Change, Elsevier, vol. 114(C), pages 254-280.
    4. Michael Demoussis & Nicholas Giannakopoulos, 2007. "Exploring Job Satisfaction in Private and Public Employment: Empirical Evidence from Greece," LABOUR, CEIS, vol. 21(2), pages 333-359, June.
    5. Francis Green, 2003. "The Rise and Decline of Job Insecurity," Studies in Economics 0305, School of Economics, University of Kent.
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    Cited by:

    1. Mark Wooden, 2021. "Job Characteristics and the Changing Nature of Work," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 54(4), pages 494-505, December.
    2. Gabrielle Penrose & Gianni La Cava, 2021. "Job Loss, Subjective Expectations and Household Spending," RBA Research Discussion Papers rdp2021-08, Reserve Bank of Australia.

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    More about this item

    Keywords

    wages; job security; automation; panel data;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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