Foreign-ownership and job insecurity during the recession: the moderating effect of union density in the UK

Abstract

The institutional influence, specifically trade unions, on the job insecurity of workers in Foreign-owned Enterprises (FoEs) has been generally overlooked. This study uses national representative private sector data to examine firm’s layoff incident and the number of staff made redundant in response to the recent 2008-2012 recession in the UK. Our probit regression and the Negative-Binomial regression show that overall FoEs appear to be more likely to undertake redundancy and to lay off more workers than Domestically-owned Enterprises. However, the strength of trade unionism, measured by union membership density, has a moderating effect in the incident of redundancies controlling for the adverse impact of the recession on companies studied and a wide range of industrial and firm characteristics. Furthermore, FoEs’ headquarter location seems to have no effect on the propensity of layoff or quantity of layoff in the UK.