Job security value

jeudi 4 février 2010 ·

In December, Monique Gagnon-Tremblay, head of Quebec's Treasury Board made a proposal to the public sector unions whose collective agreement with the government is coming to an end. The proposal made by the government would have basically covered for inflation and would not have adressed the question of the value of job security. It may be true that the unions showed themselves sympathetic to inject some flexibility within job definitions in order to increase public spending productivity, however not talking about job security is a very bad idea.

Attention to job security is important because insecurity can be associated with declining productivity and efficiency. Basically the insecurity leads to job insatisfaction which lead to a lesser job commitment. Ultimately, it can then lead to a higher rate of departure, thus increasing training costs for replacement workers. Calculating the compensation dollar value that government-provided job security represents can be a challenge tatanmount to calculating the number of hair on my co-blogger head(I don't have any hair, so I cant apply this example to myself). However it still is important, the fact that government employment stays steady in the overall economy regardless of the business cycle underlines that job security is probably the main tool of public sector attractiveness.

Looking at US Data, we see that in fact, it is the most important variables (even if its relative importance is declining in recent years). The table below illustrates the importance of the variables in the value of public sector jobs


As the Unions make preposterous new demands for job conditions and wages, it would be wise to consider the value of this benefit. Two australian economists estimated public sector job security and its value ranging from 7 percent to 21 percent. This study dates back from 2002, I presume that with the actual recession, this percentage would go up. It may be hard to calculate yet I don't think we can exclude it all. The government could probably propose a very conservative estimate of the value of job security after selecting random samples of public sector workers concerned by the new collective agreement. It would not be necessarily the true value, but at least a part of it could be accounted for.

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Source:

M.D.R. Evans et Jonathan Kelley, Australian Economy and Society 2001 - Education, Work, Welfare, Brisbane, The Federation Press, Annandale, NSW, 2002.

Gregory B. Lewis and Sue A. Frank. 2002. Who wants to work for the Government. Public Administration Review, Vol. 62, No. 4 (Jul. - Aug., 2002), pp. 395-404

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Bryan Breguet est candidat au doctorat en sciences économiques à l’université de Colombie-Britannique. D’origine Suisse, il a passé les cinq dernières années au Québec au cours desquelles il s’est engagé en politique provinciale malgré le fait qu’il ne possédait pas encore la citoyenneté canadienne. Il détient un B.Sc en économie et politique ainsi qu’une maitrise en sciences économiques de l’université de Montréal. Récipiendaire de plusieurs prix d’excellences et bourses, il connaît bien les méthodes quantitatives et leurs applications à la politique.







Vincent Geloso holds a master’s degree in economic history from the London School of Economics, with a focus on business cycles, international development, labor markets in preindustrial Europe and the new institutional economics. His research work examined the economic history of the province of Quebec from 1920 to 1960. He holds a bachelor’s degree in economics and political science from the Université de Montréal. He has also studied in the United States at the Washington Centre for Academic Seminars and Internships. Mr. Geloso has been an intern for the Prime Minister’s cabinet in Ottawa and for the National Post. He has also been the recipient of a fellowship from the Institute for Humane Studies and an international mobility bursary from the Ministère des Relations internationales du Québec. Currently, he is an economist at the Montreal Economic Institute.

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