Wages are only one dimension of the quality of workers’ new jobs. Other aspects also matter for the workers’ life and career opportunities. It has been argued that work is intimately related to other social, economic and political issues (Kalleberg 2009: 8). For instance, job insecurity not only increases workers’ levels of stress (De Witte 1999), but may also make them risk averse. Parents with unstable jobs thus may invest less in their children’s education, which affects the children’s long-term opportunities and quality of life (Esping-Andersen 2008: 75).
KeywordsUnemployment Duration Permanent Contract Multinomial Logistic Regression Analysis European Community Household Panel Displace Worker
Wages are only one dimension of the quality of workers’ new jobs. Other aspects also matter for the workers’ life and career opportunities. It has been argued that work is intimately related to other social, economic and political issues ( Kalleberg 2009: 8). For instance, job insecurity not only increases workers’ levels of stress (De Witte 1999), but may also make them risk averse. Parents with unstable jobs thus may invest less in their children’s education, which affects the children’s long-term opportunities and quality of life (Esping-Andersen 2008: 75).
Previous research suggests that workers who had experienced a spell of unemployment were at risk of being reemployed in jobs of lower quality ( Brand 2006: 290; Dieckhoff 2011: 242). One explanation comes from the human capital theory, suggesting that displaced workers’ skills may be less useful in their new job than in their former job and workers thus have to accept offers for jobs for which they are overqualified ( Becker 1962). Alternatively, reemployment in jobs of lower quality may also come about as a consequence of long spells of unemployment, which lead to skill depreciation, or loss of self-esteem and motivation (Pissarides 1992; Arulampalam 2001).
Our hypothesis with respect to job quality highlights the effects of long-term unemployment, expecting workers with long spells of unemployment to be most vulnerable to being reemployed in jobs of lower quality (hypothesis H7, see Sect. 1.4). Previous studies further indicate that workers with tertiary education and white-collar workers are particularly vulnerable to a decrease in job quality upon reemployment. Our models therefore include education and collar. In addition, we control for age, sex, tenure, district unemployment rate and plant.
This chapter focuses on four dimensions of the quality of the new jobs. We examine the type of contract, job security , skill match, and job authority. Wherever possible, our focus lies on the comparison between the workers’ pre- and post-displacement situation. In each section we start with a descriptive analysis and then proceed with an analysis of potential determinants of job quality. Finally, we examine workers’ job satisfaction and discuss its strongest determinants.
8.1 Contract Type
In their literature review on non-standard employment, Hipp et al. (2015: 357) point out that collective bargaining systems that ensure wage flexibility tend to go along with a low prevalence of temporary employment. Accordingly, our finding may be explained by the high level of wage flexibility in Switzerland, which in turn may be a result of the high degree of coordination in collective bargaining. In addition, our finding has to be interpreted in the context of the Swiss labor market, which is characterized by weak employment protection ( OECD 2004: 72). Accordingly, a permanent contract guarantees less job security than in most other continental European countries. At the same time, non-permanent contracts may be a better alternative to unemployment. Although fixed-term and temporary jobs usually imply fewer fringe benefits and less opportunity for career development (Green 2008: 151), they can sometimes be a stepping stone towards permanent jobs and protect workers from long-term unemployment (Gerfin et al. 2005: 820).
If we examine the contract type after reemployment by age (not shown), we find that workers aged over 60 had a significantly lower chance of being reemployed in a permanent contract (64 % as compared to 82–94 % for the younger cohorts). 14 % of this oldest age group was reemployed in a fixed-term and 21 % in a call-off contract, much more than in the younger age groups. Among the age groups between 16 and 55 the proportion of workers reemployed in the different types of contracts does not vary greatly. This suggests that workers aged over 55 and especially those over 60, who are rapidly approaching the legal retirement age, have a particular – and weak – position in the labor market. Once they lose their job, they not only face high barriers to return to the labor force, but also have to put up with large wage losses and jobs on probation.
8.2 Subjective Job Security
These descriptive findings correspond approximately to those on contract type. While 4 % of the workers were reemployed in temporary contracts, 5 % feel the risk of job loss to be very high. The 7 % share of workers reemployed in fixed-termed contracts roughly corresponds to the 9 % of workers indicating a rather high risk of job loss. The assumption that probably the same workers indicated working in non-permanent contracts and experiencing low job security is supported by a study based on the European Community Household Panel that shows a clear link between subjective job security and type of contract (Clark and Postel-Vinay 2009). In the 12 European countries under study, they find that subjective job security is highest for workers employed in public service jobs and the lowest for those in temporary jobs. Interestingly, they observe that the more generous the unemployment benefits are in a country, the higher is the subjective job security in all types of jobs, including temporary and private sector jobs.
With respect to the risk of job loss, a descriptive analysis (not shown) reveals a similar pattern for all age groups from 30 to over 60. Here only the youngest cohort differs from the others. Among the under-30s none of the workers experienced a very high risk of job loss, while in all other age cohorts 5–7 % of the workers evaluate their risk of losing their job as very high.
8.3 Skill Match
Skill match refers to the correspondence between workers’ skills and the requirements of their jobs. In our survey we asked the workers in a straightforward way whether they thought that the skill requirements of their new job corresponded to their own skills. Possible answers were that the skill match is adequate, that the worker is underqualified, i.e. the skills available are below the requirements, or that the worker is overqualified, i.e. the skills available are over the requirements.
Overqualification may hinder workers’ career advancement and usually goes hand in hand, other things being equal, with lower returns on their skills than for workers in a job with an adequate skill match. Moreover, based on data from the US and Spain it has been shown that overqualifaction is strongly associated with low job satisfaction (Johnson and Johnson 2000: 547; Badillo Amador et al. 2012: 322). In the Spanish study it has been shown, however, that underqualification is even more detrimental to workers’ job satisfaction.
Were older workers more often confronted with overqualification in the new job than younger workers? A descriptive analysis (not shown) suggests that this is the case for the oldest category of workers: 36 % of the over 59 year olds indicated that they were overqualified as compared to 27 % for the 50–59 year olds, 22 % for the 40–49 year olds, 29 % for the 30–39 year olds and 20 % for the under 30s. Compared to the extent of the disadvantage that older workers experienced in terms of reemployment chances and wages, their disadvantage in terms of skill match is small.
Being unemployed for 3–12 months is linked to a 7 percentage points higher risk and being unemployed for more than a year to a 14 percentage points higher risk of being overqualified in the new job as compared to workers who return to a job within 3 months. We find this effect although we control for other socio-demographic characteristics. Accordingly, the duration per se seems to have a negative effect on skill match in the new job. This finding may be due to a selection effect, unobservables driving both long-term unemployment and a decrease in job quality, or due to the fact that long unemployment durations are a negative signal to employers. Overall, we can maintain that workers with long spells of unemployment seem to receive the low-end jobs in terms of job quality.
8.4 Job Authority
These findings confirm earlier research showing that workers who experienced a spell of unemployment were more likely to experience a loss of job authority than workers who had not been unemployed. A study based on European data measuring the impact of job loss on job authority about 2 years after job loss indicates a negative effect of about 8 percentage points for Denmark and the UK ( Dieckhoff 2011: 242). Based on data from the US, the negative effect of job displacement on job authority has been estimated to be about 7 percentage points ( Brand 2006: 286).
A descriptive analysis (not shown) of the change in job authority by age reveals that the youngest cohort of the under 30 year old workers had by far the largest proportion (16 %) of workers who experienced an increase in job authority.
8.5 Job Satisfaction
The experience of the occupational transition after plant closure also depends on whether workers are satisfied with their new job, or more precisely, how job satisfaction changes as a consequence of displacement. Information about workers’ job satisfaction provides us with a subjective evaluation of more objective dimensions of job quality. In fact two recent studies suggest that job satisfaction is closely linked to workers’ job quality . Dieckhoff (2011: 243) shows for Austria and Spain that decreases in the availability of permanent contracts lead to decreases in satisfaction with job security. Based on the British Workplace Employee Relation Survey, Gazioglu and Tansel (2006: 1167) report a strong association between job security and job satisfaction as well as between income and job satisfaction. Moreover, they find that women are more satisfied with their jobs than men, low-educated workers more than highly educated ones, workers who are single more than married ones and that age has a U-shaped relation to job satisfaction.
We find a strong positive effect of tertiary education: reemployed workers with tertiary education experienced on average an increase of over 1 point in life satisfaction as compared to workers with less than upper secondary education. In addition, workers who were single experienced a more positive change in job satisfaction than workers who were married. Workers in Plant 2 experienced a much more positive development of job satisfaction than the workers in other plants. This may be due to the fact that they had known for some time that the plant was in a difficult economic situation – so difficult that they even accepted wage cuts the year before the plant closed – and thus suffered from job insecurity. A 10 % increase in wages was associated with an increase in job satisfaction of 0.3 points. Moreover, longer working hours have a negative effect on job satisfaction: an increase of 10 % in working hours was associated with a decrease in job satisfaction of about 0.7 points. In contrast, changes in job authority do not provide significant effects. In sum, this analysis shows that tertiary education and, curiously, being single cushioned workers against a decrease in job satisfaction. Changes in wages also mattered for workers’ job satisfaction, but less than changes in working hours.
The analysis of the quality of the workers’ new jobs has provided us with a more in-depth picture about the adjustment process that workers undergo after plant closure. However, we do not find as bleak a picture as might have been expected. Interestingly, 86 % of the workers were reemployed in a permanent contract . However, because of the weak employment protection in Switzerland a permanent contract does not automatically imply high job security – but does give higher security than temporary or fixed-term jobs. An analysis of the subjective risk of job loss suggests that while half of the workers think they have a low risk of losing their job, about 40 % of the workers indicate a high or a medium risk.
We are not able to identify one single factor that best explains the decreases in all dimensions of job quality . However, what we find is that long unemployment duration is associated with reemployment in non-permanent contracts, a high risk of job loss and overqualification – but is not correlated with changes in job authority. More precisely, our analysis has shown that an unemployment duration of over 1 year goes along with a substantially higher risk of experiencing a decrease in job quality. Higher levels of education are linked to two dimensions of low job quality, overqualification and lower job authority. Finally, an older age seems to be the driver of overqualification, lower job authority and a lower social status.
In a nutshell, unemployment duration seems to be particularly relevant with respect to the quality of displaced workers’ new jobs. This finding corroborates our hypothesis H7. However, it needs to be recalled that unemployment duration is not exogenous and is thus likely to be determined by unobservable variables.
This chapter shows that losing one’s job goes along with a decline in job quality. From our descriptive analysis we can conclude that in terms of all job quality dimensions some workers are disadvantaged in their new job. Some were reemployed in better jobs – for instance with higher job authority – but those who experienced an improvement are clearly fewer than those who experienced a deterioration. We therefore can maintain that plant closure has a negative impact on workers’ careers in terms of job quality. Nevertheless, the outcome is not the same for everyone and a more precise look at the data shows that some workers were reemployed in jobs of about the same and some in jobs of better quality.
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