Short- and long-term health effects of job insecurity. Fixed effects panel analysis of German data

Abstract

OBJECTIVE: Previous research has linked job insecurity to health deterioration. The risk accumulation model suggests that health effects of job insecurity may persist even after job security is restored, yet long-term empirical analyses are scarce. Our study evaluates the long-term effects of accumulated exposures to affective job insecurity on mental and physical health among the working-age population in Germany. METHOD: Using data from the German Socioeconomic Panel (12 624 individuals; 84 219 observations), we applied panel regression models with individual fixed effects to assess short- and long-term health changes associated with affective job insecurity. Job insecurity was measured by respondents’ worries about job security. Mental and physical health was recorded with the SF-12 scale. RESULTS: Job insecurity correlated with short-term worsening in mental and physical health. However, after job insecurity ceased, health recovery was incomplete resulting in a long-term health deterioration. The long-term effects were larger among respondents who accumulated more instances of job insecurity, and showed a similar pattern for mental and physical health. An additional analysis documented stronger health effects of job insecurity among lower educated persons. CONCLUSION: Our study is one of the first to empirically demonstrate the negative long-term health effects of job insecurity. Our findings for a well-protected labor market like Germany’s, suggest that the health risks associated with job insecurity may be substantial and potentially underestimated by studies that focus solely on short-term effects.