Job insecurity, employability and health: an analysis for Germany across generations

ABSTRACT

In this article, we use 12 waves of the German Socio-Economic Panel (GSOEP) to examine the relationship between job insecurity, employability and health-related well-being. Our results indicate that being unemployed has a strong negative effect on life satisfaction and health. They also, however, highlight the fact that this effect is most prominent among individuals over the age of 40. A second observation is that job insecurity is also associated with lower levels of life satisfaction and health, and this association is quite strong. This negative effect of job insecurity is, in many cases, exacerbated by poor employability.

KEYWORDS:

• Job insecurity
• employment
• employability
• well-being
• health
• Germany

JEL CLASSIFICATION:

• J21
• J22

Acknowledgements

The data used in this publication were made available by the German Socio-Economic Panel Study at the German Institute for Economic Research (DIW), Berlin. This article was presented at the research seminar of the Department of Health Systems Management at the Ben Gurion University in Beer-Sheva, Israel, and at the research seminar of the Institute for Health Care and Public Management at the University of Hohenheim, Germany. The authors would like to thank the seminar participants, as well as Jan Goebel at the DIW, Peter Zweifel and Nadav Davidovich for valuable comments and discussion.

Notes

¹ For further information on the GSOEP, see Wagner, Frick, and Schupp (2007).

² Note that the GSOEP-specific version slightly differs from the original SF-12v2 questionnaire, particularly with respect to formulation and order of questions, and general layout. For further information on the GSOEP-specific version of the SF-12v2^TM questionnaire and the computation of the physical and mental health scale scores, see Andersen et al. (2007).

³ See Table A1 for an overview of these and the outcome variables with respect to question format and coding.

⁴ In principle, the German counties resemble the statistical nomenclature of the European Union on the NUTS 3 level but are not necessarily congruent. For further information on GSOEP regional data, see Knies and Spiess (2007).

⁵ We have focused on these two macro variables because they are available at the county (NUTS 3) level and because they are directly related to the theme of our article, namely job insecurity. Although other macro variables have been shown to affect well-being (e.g. crime, democracy, etc.), we do not have such information at the county level and they are not directly related to job insecurity.

⁶ Physical and mental health scale scores (SF12) are collected every 2 years. About 70% of observations in these regression samples (71.2% for men and 67.9% for women) encompass 3 or more waves. Please note that in 2006 the GSOEP was complemented with a refreshment sample. These observations are only included for a maximum of two periods due to survey-technical reasons not due to panel attrition. However, as a robustness check, we run these regressions on subsamples including individuals observed for three and more periods. Our results do not change substantially.

⁷ Additionally, we estimate fixed-effects ordered logit models for the dependent variables life satisfaction, health satisfaction and self-assessed health using the blow-up and cluster (BUC) estimator by Baetschmann, Staub, and Winkelmann (2015). The results (direction and significance of the coefficients) remain unchanged and are available upon request from the authors.

⁸ There is a vast literature on many determinants of subjective well-being and health. We used a relative parsimonious approach and selected those determinants commonly used in the literature and available in the GSOEP. In general, income has a positive effect on well-being (Frijters, Haisken-DeNew, and Shields 2004), marriage has a negative effect (Herbst and Ifcher 2015), having children has a positive effect (Kohler, Behrman, and Skytthe 2005), being a caregiver has a negative effect (Bauer and Sousa-Poza 2015), owning an own home has an inconclusive effect (Diaz-Serrano 2009), disability has a negative effect (Van Campen and Iedema 2007) and age tends to have a U-shaped relation with well-being (Blanchflower and Oswald 2008).

Additional information

Funding

This work is part of the project ‘Ageing, Work & Health’ which is funded by the Pfizer-Stiftung für Geriatrie & Altersforschung.