The Effect of ‘Flexicurity‘ on Self-Perceived Job Insecurity

1) Background and Purpose: This study examines how the effect of labor market flexibility on self-perceived job insecurity is moderated by the level of social security. Since 1980s, labor market has become more flexible and it raised the level of job insecurity. While many of previous studies focused on objective indicators of job insecurity such as turnover rate, subjective job insecurity has been quite disregarded despite of its detrimental impacts on one’s health, family relations and so on. This study shows that subjective job insecurity is manifested differently by distinct level of labor market flexibility and social protection across countries. Furthermore, compared to previous studies, this study steps further by examining the interaction effect between the level of labor market flexibility and the level of social protection. 

2) Methods: Data and samples:This study uses two sets of data, individual-level data and country-level data. First, the individual-level data is drawn from International Social Survey Programme (ISSP) conducted in 2005 with the theme ‘work orientation’. It contains people’s attitude toward their jobs. The analysis includes individuals aged 18 to 67 who is currently employed from 18 advanced industrial countries. Random sampling and multi-stage stratified random sampling were utilized for the sampling. The country-level data regarding different level of labor market flexibility and social protection is drawn from OECD database and CWED (Comparative Welfare Entitlement Database).  

Measures:To measure the subjective job insecurity, the study uses responses to survey question ‘Do you worry about possibilities of losing your job?’ Respondents answered in 4 Likert scale. The labor market flexibility is measured by OECD’s employment protection legislation (EPL) index. The level of social protection is measured by the government expenditures on active labor market programs and social security system’s total generosity index drawn from CWED. By combining micro level data of respondents’ worries about job loss and the macro level data of countries’ institutional context, the data is structured in multi-level. Thus we use the methodology of multi-level analysis, Hierarchical Linear Model (HLM). 

3) Results: Using HLM, the study found that as the level of labor market is less flexible people feel more insecure about potential job loss. The level of social security lowers worries about job loss. The interaction effect between labor market flexibility and the level of social protection shows that as the level of social security is high, it moderates the effect of labor market flexibility on subjective job insecurity, especially the level of expenditure on active labor market programs.

4) Conclusions and Implications: This study empirically analyzes the model of ‘flexicurity’ by using the data based on people’s feeling of job insecurity. The result that the level of social security can alleviate the subjective job insecurity emphasizes the importance of social security in the era of labor market flexibility, where the job is being more and more insecure. Especially the moderating effect of welfare state’s public provision in the process of labor market flexibility’s impact on self-perceived job insecurity shows the balance between flexibility and security is crucial.