Prajapati, Bina
(2011)
Globalisation and the labour market: an analysis of job stability and job security in Britain.
PhD thesis, University of Nottingham.
Abstract
Globalisation represents the increased international integration of goods, services, labour, technology, knowledge, ideas and capital of national economics from around the world. It also evokes many opinions in relation to the costs and benefits it can provide. Globalisation can bring greater benefits to countries in the form of greater productivity and output, potentially faster economic growth, increased welfare and even greater incentives to innovate. However, workers fear that globalisation costs more jobs than it creates (Eurobarometer, 69) and it could cause the structure of employment to permanently change over time. Ideally, workers would like to have jobs that last a life time Gob security) and jobs that pay a predictable wage Gob stability). Yet, should workers become dislocated from their jobs through firm closure or through layoffs, workers hope their prospective re-employment in new jobs is secure and stable with few short-term adjustment costs over time. But, many workers believe 'jobs are not for life' and this is in part attributed towards globalisation - increased trade and advancements in technology, the fall in transportation costs, exchange rate volatility and offshoring are all potential factors that have contributed towards greater competition in world markets for goods and services over the last thirty years. This thesis examines whether job security and job stability have changed over this time. It focuses on whether offshoring and the advancements in technology have increasing made jobs less secure and whether they have increasing made wage levels within jobs more volatile.
Chapters 2 and 3 review the literature: chapter 2 explores the potential forces that could cause labour market insecurity to rise and chapter 3 examines the existing empirical literature to see whether labour market security has declined over time. From these reviews, chapter 2 finds that trade, the advancements in ICT and domestic policy reforms to labour market institutions have caused the structure of employment to change in favour of skilled labour at the expense of less-skilled workers even though the employment level has not significantly changed over the post 1990s to the latter 2000s. And the empirical evidence from chapter 3 finds that labour market security, which is composed of (a) job security, (b) income volatility within jobs (job stability) and (c) the loss of earnings between jobs has also not changed significantly from the 1970s to the early 20OOs.
Chapter 4 examines the effects of industry level offshoring intensity and the advancements in ICT over the post 1990s have increasingly had an impact on the wage levels of individual workers. This chapter finds the impact of service offshoring (measured at the industry level), the potential threat from the advancements of technology that increasingly pose a threat to many more potentially tradable occupations (job tradability measured from the application of Blinder's (2007) occupation tradability index) and the threat of TBTC - particularly from the importance of completing routine intensive job tasks, have all had a negative and significant impact on the wage levels of workers over the period 1992 to 2007.
Chapter 5 examines whether a rise in offshoring intensity could lead to a rise in job insecurity by increasing the probability of becoming unemployed. Using individual level data from 1992- 2005, the results show a rise in offshoring (materials and services) and the advancements in ICT did not lower job security, it actually raises the probability of remaining in employment. This chapter also finds workers were more likely to remain in employment with their current employers. But workers employed in potentially the more tradable jobs that are also routine job task intensive appear to have a higher probability of becoming unemployed. Collectively, chapter 4 and 5 suggest that while offshoring may put downward pressure on wage levels, it has had little impact on job security. Workers appear to sacrifice job stability for job security.
Chapter 6 addressed whether there has been a secular decline in job security over the last two decades. Using job tenure and job transitions as measures for job security, this thesis finds medium [longer-term] job tenure shares (job tenure greater than or equal to five [ten] years) declined by 7.95% [8.85%] and 8.70% [7.95%] for men and for women with no children from 1992 to 2006. These declines are not indicative of a rise in job-to-job transitions, but a slender rise in job-to-unemployment and job-to-non-employment transitions over the time frame. Further analysis shows there is no evidence that these latter job transition results have arisen because of a rise in involuntary job separations resulting from redundancies or from firm closures over time.
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