Working Paper: NBER ID: w7472
Authors: David Neumark
Abstract: I synthesize and summarize a set of recent papers on changes in the employment relationship. The authors of these papers present the most up-to-date and accurate assessment of their evidence on changes in job stability and job security, and attempt to reconcile their evidence with the findings of other research, including the other papers discussed herein. Some of papers also begin to explore explanations of changes in the employment relationship. The evidence suggests that the 1990's witnessed some changes in the employment relationship consistent with weakened bonds between workers and firms. But the magnitudes of these changes indicate that while these bonds may have weakened, they have not been broken. Furthermore, the changes that occurred in the 1990's have not persisted very long. It is therefore premature to infer long-term trends towards declines in long-term employment relationships, and even more so to infer anything like the disappearance of long-term, secure jobs. The papers examining sources of changes in job stability and job security in the 1990's point to some potential explanations, including relative wage movements, growth in alternative employment relationships, and downsizing. However, with the possible exception of the first of these, this list does not encompass fundamental' or exogenous changes impacting the employment relationship, but rather to some extent suggests how various changes in the employment relationship may reinforce each other. Understanding the structural changes underlying empirical observations on changes in job stability and job security is likely to be a fruitful frontier for future research on the employment relationship.
Keywords: job stability; job security; employment relationship
JEL Codes: J63; J64
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| job stability (J63) | job security (J28) |
| wage movements (J31) | job stability (J63) |
| alternative employment relationships (J63) | job stability (J63) |
| downsizing (L25) | job stability (J63) |
| 1990s changes in employment relationship (J29) | weakened bonds between workers and firms (J63) |
| share of workers with less than 18 months of tenure (J63) | increased turnover (J63) |
| job stability fell from the 1970s to the 1980s (J63) | increased separation rates among young men (J12) |
| retention rates for longer tenures fell (J63) | weakened job stability (J63) |