Employment status and perceived health condition: longitudinal data from Italy

The considerable increase of non-standard labor contracts, unemployment and inactivity rates raises the question of whether job insecurity and the lack of job opportunities affect physical and mental well-being differently from being employed with an open-ended contract. In this paper we offer evidence on the relationship between Self Reported Health Status (SRHS) and the employment status in Italy using the Survey on Household Income and Wealth; another aim is to investigate whether these potential inequalities have changed with the recent economic downturn (time period 2006-2010). We estimate an ordered logit model with SRHS as response variable based on a fixed-effects approach which has certain advantages with respect to the random-effects formulation and has not been applied before with SRHS data. The fixed-effects nature of the model also allows us to solve the problems of incidental parameters and non-random selection of individuals into different labor market categories. We find that temporary workers, unemployed and inactive individuals are worse off than permanent employees, especially males, young workers, and those living in the center and south of Italy. Health inequalities between unemployed/inactive and permanent workers widen over time for males and young workers, and arise in the north of the country as well.