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Consequences and coping strategies in the face of job insecurity
Abstract: Whether through stated or revealed preferences, job security still emerges as one of the job characteristics that matter most to workers. Although a large number of contributions have already established that job insecurity reduces individual well-being, many European governments have decided to weaken their employment protection legislation over the last three decades. The weakening of employment protection has not only had direct effects on individual well-being but also provokes the development of coping strategies on the part of workers.
In this presentation I will focus on the consequences of two labour market reforms (one in France and one in Italy). Using difference-in-difference strategies and rich survey data sets, the results first confirm that a decrease in job protection has a strong negative effect on subjective well-being. Second, workers are found to be both ‘prudent’ and ‘temperant’ (as defined by Miles Kimball) in the sense that they adopt strategies within their personal lives to mitigate the effects of greater exposure to the risk of job loss.
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