By Vivien Lim, For The Straits Times

AS A result of the global recession, millions of jobs have been lost worldwide. Singapore, being heavily dependent on trade, is especially sensitive to the health of the global economy. DBS, the largest lender in Southeast Asia, publicly announced layoffs last November - one of the first companies here to do so. Others such as Yahoo and Panasonic followed suit.

The first quarter of this year saw almost 13,000 employees being made redundant; the second quarter, another 5,500. More than 30,000 employees in Singapore were placed on a shorter work week or were laid off. Singapore Airlines, for instance, implemented schemes for employees to voluntarily work fewer days.

Though NTUC secretary-general Lim Swee Say has urged companies to use layoffs only as a last resort, the harsh reality is that reduced demand cannot sustain jobs and costs have to be curtailed for businesses to remain viable. Cutting jobs has an immediate effect on the bottom line and can mean survival for businesses.

But what repercussions does losing a job, or the threat of losing it, have on families - not just the employed or recently unemployed, but also their dependants? Does job insecurity affect both working parents as well as other family members, especially the children?

At the National University of Singapore Business School, I, together with several graduate students, studied the effects of job insecurity.

In general, our findings indicate that the spillover phenomenon, in which an employee's work experiences affect home life and vice versa, occurs. We also observed that job insecurity affected fathers and mothers differently.

In Asia, where men are generally expected to be the breadwinner, the work role is considered central to fathers' lives. Potential retrenchment and hence their inability to provide for the family may prove more challenging for fathers and cause them greater anxiety over financial issues.

By contrast, a mother's employment and income may be treated as secondary and supplementary to her husband's income. Our findings showed that job insecurity has less effect on a mother's concerns about money than it does on a father's.

We also found children to be affected by parental distress, concerns and worries about money matters. Children learn about their parents' work experiences by talking to their parents and observing their moods and behaviour.

When children perceive their parents to be having some sort of money anxiety arising from the fear of losing their jobs, they also develop feelings of insecurity and feel anxious about money matters.

Significantly, such anxiety shapes children's attitudes towards money. Children who experience financial anxiety are more likely to place a greater emphasis on money matters relative to other aspects of their lives. Money occupies a central position in their value system.

The motive for obtaining money though, tends to be for social comparison purposes or the desire to gain power over others. Such children view money as instrumental in alleviating their feelings of self-doubt. In other words, children whose parents face job insecurity tend to view money as a means to look better socially.

There was also evidence that children with financial anxiety tend to end up working for money rather than because they enjoy the work. They view jobs as a means to an end and are less interested in doing good work. Hence, being exposed to parental unemployment may lead to negative work attitudes in children.

While job redundancies may help to address immediate business cost concerns, they take a toll on a society's work ethic and values. Therefore, Mr Lim's call for companies to engage in other forms of cost-cutting and to use layoffs as a last resort may have ramifications that go beyond immediate bread-and-butter issues.

The writer is an associate professor from the National University of Singapore Business School.

This article was first published in The Straits Times.