Changes in the economic environment over past decades have led to growing concern about decreasing job stability and the disappearance of the ‘job for life’. There is a fear that globalisation and technological progress have led to changes in the labour market, which may in turn have reduced job tenure (defined as the length of time a worker has been continuously employed by the same employer). In addition to these potential long-term trends, the recent economic and financial crisis may also have affected job stability.
This study provides a comprehensive picture of the evolution of job tenure between 2002 and 2012. It analyses the entire tenure distribution in terms of mean, short and long tenure using data from the European Union Labour Force Survey (EU-LFS). This is done for the EU27 (minus Malta), by Member State, and for different sociodemographic and job characteristics, examining in particular how tenure evolved before and during the crisis. The link between job tenure and earnings is also investigated.
Employment protection law and the volatility of the business cycle both influence job turnover and so help to explain differences in tenure levels across countries. Job tenure is of paramount interest to workers since it can be interpreted as a measure of job stability. Examining the level and structure of job tenure over time enables an assessment of whether job stability has actually decreased (and to what extent) or whether fears about decreasing job tenure and the disappearance of a ‘job for life’ are overstated.
It is important to distinguish between job stability (taking job tenure as a proxy) and job security as perceived by workers. The latter may be influenced not only by the risk of losing a job but also by the consequences of losing a job, which in turn depends on the chance of re-employment and the level of expected protection in case of unemployment (through unemployment benefits or active labour market policies). At times of high unemployment, jobs may be considered to be more unstable, although this may not be reflected by lower job tenure.