Transient Jobs and Lifetime Jobs: Dualism in the British Labour Market
| Author | Simon Burgess,Hedley Rees |
| DOI | http://doi.org/10.1111/1468-0084.00068 |
| Published date | 01 August 1997 |
| Date | 01 August 1997 |
OXFORD BULLETIN OF ECONOMICS AND STATISTICS, 59, 3 (1997)
0305-9049
TRANSIENT JOBS AND LIFETIME JOBS:
DUALISM IN THE BRITISH LABOUR MARKET
Simon Burgess and Hedley Rees*
I. INTRODUCTION
This paper addresses a straightforward empirical question: how long does
a job last in Britain? There is a view that ‘jobs for life’ have gone for
good, driven out by the introduction of new technologies and intensified
foreign competition that became apparent in the 1980’s. Recent policy
discussions and popular debates appear to have been based on this hypo-
thesis. Yet there is very little evidence for the UK on job tenure. We look
at data from 1990 and 1985 to estimate the distribution of completed job
tenures for men and women in Britain. This paper offers no time series
perspective: that is, we are not asking whether the distribution of job
tenures has changed over time. In a companion paper, Burgess and Rees
(1996), we look at the evidence on elapsed job tenure for a long time
span, 1975–92 and find that jobs are only marginally shorter in 1992 for
men, and not at all for women.
The present paper undertakes the complementary task of estimating
the completed tenure distribution from data on elapsed tenure. We find
evidence of great diversity of experience: a lot of workers have very short
jobs and a lot of workers have very long jobs. Specifically, around a
quarter of men are in jobs lasting less than five years, but the same
number are in jobs that will last over 30 years. The analogous figures for
women are 41 percent and 12 percent. It appears that there is duality or
heterogeneity in the labour market. This is partly accounted for by age
(younger workers have short jobs, older workers have long jobs), but only
partly: even among prime age workers, there are some in short jobs and
some in long jobs. We conclude that the labour market is still capable of
offering ‘lifetime jobs’1to large numbers of workers, but that some are
*We are grateful to Carol Propper, David Winter and participants at seminars in Bristol,
Canterbury and Birkbeck College for useful comments, to Richard Tutin, Renitha Thomas
De Silva and Robert Straw for providing excellent research assistance and to CEPR for
funding them. Helpful suggestions from referees are also gratefully acknowledged. Any errors
are our own.
1Hall (1982) termed jobs lasting at least 20 years as lifetime jobs.
309
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stuck in transient jobs. We supplement this result with analysis of job
tenure by age, gender, industry and occupation.
After briefly reviewing the literature on job tenure, the remainder of
this paper is organized as follows. Section II describes the data used
(details are available from the authors). Section III discusses the model-
ling of completed job tenure. Data on job tenure are almost always about
elapsed job tenure rather than completed job tenure, the variable of
interest: Section III describes the techniques used to deduce the latter
from the former. Section IV presents the results and Section V concludes.
There have been numerous studies of turnover and job tenure. Much
of the theory is based on search models, specific capital formation and
contract theory. The classic empirical work is Hall’s (1982) evidence on
the importance of lifetime jobs in the US labour market. More recent
papers include Farber (1994, 1995), Ureta (1992), Diebold, Neumark and
Polsky (1994), and Swinnerton and Wial (1995). For Britain, Stern (1982)
looks at the completed job durations of a sample of the unemployed
inflow and Main (1982) uses New Earnings Survey data from 1976 on
interrupted job tenures. More recently, Wadsworth (1989) creates a two-
period longitudinal dataset from the Labour Force Survey and computes
some job continuation rates and hence a completed tenure distribution.
II. DATA
The data used in this study are taken from the General Household Survey
(GHS). The GHS is carried out annually on a random sample of approxi-
mately 8,000 households giving a total sample of some 30,000 individuals
each year. The variable which is of central interest here is the answer to
the following question: ‘How long have you been with your present
employer?’ The answers are grouped into bands. For our years 1985 and
1990, the data are annual up to three years, biannual from three to five
years and then in five-year bands up to 40 years and open-ended there-
after. Further details are in a Data Appendix available from the authors.
III. INTERPRETATION AND MODELLING
The relevant economic analysis is a model of the job separation rate. In
fact, when considering the distribution of job tenure across individuals,
the hiring rate matters as well as out of steady-state behaviour. We are
not providing an analysis of the determinants of turnover here, and so
will not consider in detail the components of separations, layoffs and
quits (see Hall, 1979; Mortensen, 1986; Nickell, 1986; Burgess and
Nickell, 1990; McLaughlin, 1991).
There are two issues to discuss in terms of a statistical model of the
process. The first is that our data refer only to elapsed (incomplete) job
tenure, not completed job tenure. The relationship between these is best
© Blackwell Publishers 1997
310 BULLETIN
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