A Temporal Comparison of the Effects of Unemployment and Job Insecurity on Wellbeing

Analyses of individuals’ working lives make a variety of assumptions about the relationship between time, wellbeing and economic stress. Some assume that stress will accumulate in adverse environments, leading to chronic effects of, for instance, long-term unemployment or job insecurity. Other studies emphasize the acute effects of changes per se, and assume adaptation. This paper examines how employees respond both to acute and chronic job insecurity.

This paper will use two datasets. The first is from a survey of over 300 UK employees employed in 26 companies; this dataset included both qualitative and quantitative data, at both employer and employee levels. The second dataset consisted of longitudinal data from the British Household Panel Survey. It was found that the unexpected announcement of job insecurity can cause a sudden and marked spike in psychological symptoms. Looking at longer-term effect for prolonged periods of job insecurity, wellbeing (i.e. symptoms of anxiety and depression) continues to deteriorate for at least a year, with no sign of leveling off or recovery. This is in contrast to the findings on long-term unemployment, where there is evidence of adaptation and slight improvements in psychological wellbeing after six months. The reasons for these opposing patterns between job insecurity and unemployment are discussed in terms of the challenge for individuals attempting to cope with perceived future uncertainty during the prolonged recovery from the current recession.