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Given that a relationship has been established between employment status and psychological well-being, the deepening segmentation of the Spanish labour market may be putting the mental health of part of the population at risk. However, the relationship between work and well-being could be influenced by unobservable subjective characteristics and, consequently, two people with the same job characteristics could be affected differently by precariousness. This research tackles the problem of the unobserved heterogeneity resulting from subjective variables related to work satisfaction. A finite mixed model is applied to analyse, firstly, how jobs characterized by greater instability may affect well-being and, secondly, to study how the way in which well-being is affected could depend on how the person evaluates their job satisfaction. Data from the National Health Survey of Spain have been used to perform the analysis. We conclude that, when compared to short-term temporary contracts, self-employed and atypical situations, the stability of permanent work contracts provides greater well-being if some previous conditions of job satisfaction are met. When these conditions are not met, the protective factor provided by permanent contracts is somehow diluted, and only tenured civil servants show advantages vis-à-vis the rest of work situations.

Effects of precarious work on mental health: evidence from Spain