An exploration in job stability

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Résumé (français)

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Résumé (anglais)

The goal of this dissertation is to document striking new job stability patterns in Canada and explore their causes. The first paper (Chapter 2) shows how to correctly apply the retention rate approach to cross sectional data. I propose two cross sectional estimators and clearly identify the conditions required for consistency. I demonstrate the bias of existing approaches for calculating standard errors, and propose an alternative method. finally, using Current Population Survey data I show that existing approaches to estimating standard errors may lead the researcher to falsely reject the null hypothesis of no change in job stability. The second paper (Chapter 3) documents the changing job stability patterns in Canada over the 1977–2004 period. I use a retention rate approach which is less sensitive to job inflows than in-progress measures, but for which the data requirements are severe. In North America, only the Canadian Labour Force Survey satisfies these stringent data requirements. Using this rich source of data and tools developed in Chapter 2, I find that overall job stability has actually increased in Canada since the early 1990s. Two other key findings include an increase in the relative stability of women and a large increase in stability for jobs with initial tenure of less than one year. The third paper (Chapter 4) explores the causes of the new job stability patterns that were documented in Chapter 3. Results indicate that the ageing of the workforce, increased educational attainment and increased labour force attachment of women play an important role in the aggregate patterns. However, only rising educational attainment matters for newer jobs—with a large part of the increase still unexplained. I use a match quality framework to explore for changes in job stability along tenure lines. The model predicts that stricter eligibility requirements introduced in the early 1990s for the Employment Insurance program should result in better match formation, and as such, lead to an increase in stability of newer jobs. The empirical findings of this thesis are consistent with such predictions.