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Title:Job insecurity, employability, unemployment and well-being PDF Logo
Authors:Green, Francis
Issue Date:2009
Series/Report no.:School of Economics discussion papers 09,18
Abstract:This paper shows that employability strongly moderates the effects of unemployment and of job insecurity on well-being. I develop a simple framework for employment insecurity and employability with two key features. First, it allows for the risks surrounding unemployment and employment transitions to affect well-being both directly and indirectly through their impact on expected income. Second, the framework allows for the interaction between unemployment and employability, and between job insecurity and employability. Using panel data from Australia, I provide new random effects and fixed effects estimates of the impact of unemployment and of job insecurity on life satisfaction and on mental health, in the context of a model that takes account of the interacting risks. As predicted, unemployed people with little hope of finding a job enjoy the least well-being by a considerable margin, while employed people who are both highly employable and in a secure job enjoy the most. In between there is substantial differentiation according to employability, job insecurity and their interaction. Compared to a secure job the deleterious effects of high job insecurity on well-being are comparable to the effects of unemployment. Both are substantial. The findings are used to compute estimates of the well-being trade-off between increases in job insecurity and increases in employability, relevant to the support of 'flexicurity' and similar employment policies.
Subjects:life satisfaction
mental health
unemployment
employment
job insecurity
employability
flexicurity
employment insecurity
flexibility
JEL:J28
J6
I12
Document Type:Working Paper
Appears in Collections:School of Economics Discussion Papers, University of Kent

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