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Job insecurity and financial distress

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  • Caterina Giannetti
  • Marianna Madia
  • Luigi Moretti

Abstract

This article investigates the effects of different job categories on households' likelihood of experiencing financial distress. Given imperfect financial markets and the absence of unemployment subsidies, households with less secure jobs are likely to experience drops in income more frequently than households with well-protected jobs. Households' abilities to deal with financial decisions (i.e. financial literacy) can mitigate these problems. Our results suggest that -- with respect to stable workers -- greater job uncertainty for insecure workers increases the probability of being in financial distress similarly to other working statuses (e.g. unemployment), and in some cases even more (i.e. part-time workers). However, a high level of financial literacy can counterbalance this effect, especially for atypical workers.

Suggested Citation

  • Caterina Giannetti & Marianna Madia & Luigi Moretti, 2014. "Job insecurity and financial distress," Applied Financial Economics, Taylor & Francis Journals, vol. 24(4), pages 219-233, February.
  • Handle: RePEc:taf:apfiec:v:24:y:2014:i:4:p:219-233
    DOI: 10.1080/09603107.2013.872759
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    Cited by:

    1. Wai Ming To & Jennifer H. Gao & Ernest Y. W. Leung, 2020. "The Effects of Job Insecurity on Employees’ Financial Well-Being and Work Satisfaction Among Chinese Pink-Collar Workers," SAGE Open, , vol. 10(4), pages 21582440209, December.
    2. Valerio Ghezzi & Valeria Ciampa & Tahira M. Probst & Laura Petitta & Ivan Marzocchi & Ilaria Olivo & Claudio Barbaranelli, 2022. "Integrated Patterns of Subjective Job Insecurity: A Multigroup Person-Centered Study," IJERPH, MDPI, vol. 19(20), pages 1-20, October.

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    More about this item

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance

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