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Does job insecurity deteriorate health? A causal approach for Europe

  • Caroli, Eve
  • Godard, Mathilde

This paper estimates the causal effect of perceived job insecurity – i.e. the fear of involuntary job loss – on health in a sample of men from 22 European countries. We rely on an original instrumental variable approach based on the idea that workers perceive greater job security in countries where employment is strongly protected by the law, and relatively more so if employed in industries where employment protection legislation is more binding, i.e. in industries with a higher natural rate of dismissals. Using cross-country data from the 2010 European Working Conditions Survey, we show that when the potential endogeneity of job insecurity is not accounted for, the latter appears to deteriorate almost all health outcomes. When tackling the endogeneity issue by estimating an IV model and dealing with potential weak-instrument issues, the health-damaging effect of job insecurity is confirmed for a limited subgroup of health outcomes, namely suffering from headaches or eyestrain and skin problems. As for other health variables, the impact of job insecurity appears to be insignificant at conventional levels.

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Paper provided by CEPREMAP in its series CEPREMAP Working Papers (Docweb) with number 1410.

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Length: 38 pages
Date of creation: Jul 2014
Date of revision:
Handle: RePEc:cpm:docweb:1410
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  1. Andrew Clark & Fabien Postel-Vinay, 2005. "Job security and job protection," LSE Research Online Documents on Economics 19904, London School of Economics and Political Science, LSE Library.
  2. Arndt Reichert & Harald Tauchmann, 2011. "The Causal Impact of Fear of Unemployment on Psychological Health," Ruhr Economic Papers 0266, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  3. Cheng, Yawen & Chen, Chun-Wan & Chen, Chiou-Jong & Chiang, Tung-liang, 2005. "Job insecurity and its association with health among employees in the Taiwanese general population," Social Science & Medicine, Elsevier, vol. 61(1), pages 41-52, July.
  4. Justina A. V. Fischer & Alfonso Sousa-Poza, 2008. "Does Job Satisfaction Improve the Health of Workers?: New Evidence Using Panel Data and Objective Measures of Health," SOEPpapers on Multidisciplinary Panel Data Research 76, DIW Berlin, The German Socio-Economic Panel (SOEP).
  5. Petter Lundborg, 2013. "The health returns to schooling—what can we learn from twins?," Journal of Population Economics, Springer, vol. 26(2), pages 673-701, April.
  6. Bassanini, Andrea & Garnero, Andrea, 2012. "Dismissal Protection and Worker Flows in OECD Countries: Evidence from Cross-Country/Cross-Industry Data," IZA Discussion Papers 6535, Institute for the Study of Labor (IZA).
  7. Sandy Tubeuf & Florence Jusot & Marion Devaux & Catherine Sermet, 2008. "Social heterogeneity in self-reported health status and measurement of inequalities in health," Working Papers DT12, IRDES institut for research and information in health economics, revised Jun 2008.
  8. László, Krisztina D. & Pikhart, Hynek & Kopp, Mária S. & Bobak, Martin & Pajak, Andrzej & Malyutina, Sofia & Salavecz, Gyöngyvér & Marmot, Michael, 2010. "Job insecurity and health: A study of 16 European countries," Social Science & Medicine, Elsevier, vol. 70(6), pages 867-874, March.
  9. Joshua Angrist & Alan Krueger, 2001. "Instrumental Variables and the Search for Identification: From Supply and Demand to Natural Experiments," Working Papers 834, Princeton University, Department of Economics, Industrial Relations Section..
  10. repec:ese:iserwp:2003-02 is not listed on IDEAS
  11. Card, David, 2001. "Estimating the Return to Schooling: Progress on Some Persistent Econometric Problems," Econometrica, Econometric Society, vol. 69(5), pages 1127-60, September.
  12. Ferrie, Jane E. & Shipley, Martin J. & Marmot, Michael G. & Stansfeld, Stephen & Smith, George Davey, 1998. "The health effects of major organisational change and job insecurity," Social Science & Medicine, Elsevier, vol. 46(2), pages 243-254, January.
  13. Browning, Martin & Heinesen, Eskil, 2012. "Effect of job loss due to plant closure on mortality and hospitalization," Journal of Health Economics, Elsevier, vol. 31(4), pages 599-616.
  14. Bockerman, Petri & Ilmakunnas, Pekka & Johansson, Edvard, 2010. "Job security and employee well-being: Evidence from matched survey and register data," MPRA Paper 21961, University Library of Munich, Germany.
  15. Bardasi, Elena & Francesconi, Marco, 2004. "The impact of atypical employment on individual wellbeing: evidence from a panel of British workers," Social Science & Medicine, Elsevier, vol. 58(9), pages 1671-1688, May.
  16. Deb, Partha & Gallo, William T. & Ayyagari, Padmaja & Fletcher, Jason M. & Sindelar, Jody L., 2011. "The effect of job loss on overweight and drinking," Journal of Health Economics, Elsevier, vol. 30(2), pages 317-327, March.
  17. Green, Francis, 2011. "Unpacking the misery multiplier: How employability modifies the impacts of unemployment and job insecurity on life satisfaction and mental health," Journal of Health Economics, Elsevier, vol. 30(2), pages 265-276, March.
  18. Chernozhukov, Victor & Hansen, Christian, 2008. "The reduced form: A simple approach to inference with weak instruments," Economics Letters, Elsevier, vol. 100(1), pages 68-71, July.
  19. John Haltiwanger & Stefano Scarpetta & Helena Schweiger, 2010. "Cross country differences in job reallocation: the role of industry, firm size and regulations," Working Papers 116, European Bank for Reconstruction and Development, Office of the Chief Economist.
  20. Chadi, Adrian & Hetschko, Clemens, 2013. "Flexibilisation without hesitation? Temporary contracts and workers' satisfaction," Discussion Papers 2013/3, Free University Berlin, School of Business & Economics.
  21. Fabrice Etilé & Carine Milcent, 2006. "Income-related reporting heterogeneity in self-assessed health: evidence from France," PSE Working Papers halshs-00590524, HAL.
  22. Givord, Pauline & Maurin, Eric, 2004. "Changes in job security and their causes: An empirical analysis for France, 1982-2002," European Economic Review, Elsevier, vol. 48(3), pages 595-615, June.
  23. A. B. Atkinson, 2001. "A Critique of the Transatlantic Consensus on Rising Income Inequality," The World Economy, Wiley Blackwell, vol. 24(4), pages 433-452, 04.
  24. Daniel Sullivan & Till von Wachter, 2009. "Job Displacement and Mortality: An Analysis Using Administrative Data," The Quarterly Journal of Economics, MIT Press, vol. 124(3), pages 1265-1306, August.
  25. Mandal, Bidisha & Ayyagari, Padmaja & Gallo, William T., 2011. "Job loss and depression: The role of subjective expectations," Social Science & Medicine, Elsevier, vol. 72(4), pages 576-583, February.
  26. Origo, Federica & Pagani, Laura, 2009. "Flexicurity and job satisfaction in Europe: The importance of perceived and actual job stability for well-being at work," Labour Economics, Elsevier, vol. 16(5), pages 547-555, October.
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