Insecure times? Workers' perceived job and labor market security in 23 OECD countries

• How do institutions generate confidence and positive expectations among individuals regarding their economic future?
• The analyses distinguish between different facets of perceived job security and different institutional mechanisms.
• Unemployment assistance is an effective means of reducing workers’ worries about job loss.
• Dismissal protection, by contrast, only unleashes its psychologically protective effects under certain conditions.
• Different types of labor market institutions rather serve as complements than as substitutes.

By examining the association between employees' perceptions of job security and central labor market policies and characteristics, this paper seeks to understand the mechanisms through which institutions generate confidence and positive expectations among individuals regarding their economic future. The analyses distinguish between different facets of perceived job security and different institutional mechanisms. My multilevel analyses of a data set that contains information on 12,431 individuals and 23 countries show that some labor market policies and characteristics are more likely than others to provide workers with subjective security. Unemployment assistance in particular is an effective means of reducing workers' worries about job loss. Dismissal protection, by contrast, only unleashes its psychologically protective effects under certain conditions. The paper's main conclusion is that the effectiveness of policies varies and that different types of labor market institutions serve as complements rather than as substitutes.