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Does job insecurity deteriorate health?

  • 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 Paris Dauphine University in its series Economics Papers from University Paris Dauphine with number 123456789/13646.

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Date of creation: 2015
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Publication status: Published in Health Economics, 2015
Handle: RePEc:dau:papers:123456789/13646
Contact details of provider: Web page: http://www.dauphine.fr/en/welcome.html

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  15. 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.
  16. 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.
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