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Does job insecurity deteriorate health?
Author(s) -
Caroli Eve,
Godard Mathilde
Publication year - 2016
Publication title -
health economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.55
H-Index - 109
eISSN - 1099-1050
pISSN - 1057-9230
DOI - 10.1002/hec.3122
Subject(s) - endogeneity , instrumental variable , job security , employment protection legislation , job insecurity , demographic economics , job loss , legislation , social security , sample (material) , economics , labour economics , work (physics) , econometrics , political science , economic growth , unemployment , mechanical engineering , market economy , law , engineering , chemistry , chromatography
Summary This paper estimates the causal effect of perceived job insecurity – that is, 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 on the basis of the idea that workers perceive greater job security in countries where employment is strongly protected by the law and more so if employed in industries where employment protection legislation is more binding; that is, in induastries 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 instrumental variable 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. Copyright © 2014 John Wiley & Sons, Ltd.