Declining Job Security

This article defines and analyzes job security in the context of implicit contracts designed to overcome incentive problems in the employment relationship. Contracts of this nature generate predictions concerning the relationship between job security parameters—such as worker seniority and sectoral economic conditions—and the probability of separations. To test these predictions, I estimate binomial and multinomial models of job separations using Panel Study of Income Dynamics (PSID) data for the years 1976‐93. The results are consistent with a decline over time in the incentives to maintain existing employment relationships for male workers and for skilled white‐collar women.