3 workers feel more insecure.Stated in terms of the underlying labor economics,the central idea is that FDI by MNEs increases firms'elasticity of demand for labor.More-elastic labor demands, in turn,raise the volatility of wages and employment-and thereby raise worker insecurity. This theoretical framework motivates our empirical analysis of the relationship between the multinationalization of production and the economic insecurity of workers.We present new evidence,based on analysis of individual-level panel data from Great Britain over 1991-1999, that FDI activity in the industries in which individuals work is positively correlated with individual perceptions of worker insecurity.This correlation holds in analyses accounting for individual-specific effects and a wide variety of control variables.Moreover,FDI exposure has one of the largest substantive effects in accounting for the within-individual variation in insecurity.We regard these individual-level panel results as the first valid evidence consistent with a causal relationship from FDI to worker insecurity. There are four remaining sections to the paper.The next section provides a theoretical framework for the economics of FDI and worker insecurity.Section 3 describes the data to be used in the study and the econometric models to be estimated.Section 4 reports the empirical results and the final section concludes. 2.Theoretical Framework for FDI and Worker Insecurity 2.1 Defining Worker Insecurity Although there are a number of alternative definitions of economic insecurity,most often it is understood to be an individual's perception of the risk of economic misfortune (Dominitz and Manski 1997).Consequently,researchers have focused on the risk of events such as the loss of health insurance,being a victim of a burglary,losing a job,and significant decreases in wages (e.g.,Anderson and Pontusson 2001,Mughan and Lacy 2002).3 workers feel more insecure. Stated in terms of the underlying labor economics, the central idea is that FDI by MNEs increases firms’ elasticity of demand for labor. More-elastic labor demands, in turn, raise the volatility of wages and employment—and thereby raise worker insecurity. This theoretical framework motivates our empirical analysis of the relationship between the multinationalization of production and the economic insecurity of workers. We present new evidence, based on analysis of individual-level panel data from Great Britain over 1991-1999, that FDI activity in the industries in which individuals work is positively correlated with individual perceptions of worker insecurity. This correlation holds in analyses accounting for individual-specific effects and a wide variety of control variables. Moreover, FDI exposure has one of the largest substantive effects in accounting for the within-individual variation in insecurity. We regard these individual-level panel results as the first valid evidence consistent with a causal relationship from FDI to worker insecurity. There are four remaining sections to the paper. The next section provides a theoretical framework for the economics of FDI and worker insecurity. Section 3 describes the data to be used in the study and the econometric models to be estimated. Section 4 reports the empirical results and the final section concludes. 2. Theoretical Framework for FDI and Worker Insecurity 2.1 Defining Worker Insecurity Although there are a number of alternative definitions of economic insecurity, most often it is understood to be an individual’s perception of the risk of economic misfortune (Dominitz and Manski 1997). Consequently, researchers have focused on the risk of events such as the loss of health insurance, being a victim of a burglary, losing a job, and significant decreases in wages (e.g., Anderson and Pontusson 2001, Mughan and Lacy 2002)