Global financial crisis and perceptions of job insecurity: The China case

Abstract

Studies on perception of job insecurity (PJI) in relation to financial crises and on China have been extremely scant. Regression analysis of Chinese household survey (N=6681) was performed in order to assess the relationship between PJI and the 2008 global financial crisis. To address the possible endogeneity between PJI and the crisis indicator, we use relevant instrumental variables and compute the results using two stage least square (2SLS). We found that PJI in China were significantly correlated with the 2008 global financial crisis despite its high economic growth and frequent government interventions. Income and wealth reductions emanating from the crisis were also significantly correlated with PJI. Government's expansionary policies appear to be effective in ameliorating the workers’ PJI. Social developments such as provisions of social security and income protection measures could also be used to reduce Chinese workers’ job insecurity perception.