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Does Job Insecurity Deteriorate Health? A Causal Approach for Europe
Eve Caroli 1, 2, 3, 4, Mathilde Godard 4, 5, 6

This paper estimates the causal effect of perceived job insecurity { i.e. 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 based on the idea that workers perceive greater job security in countries where employment is strongly protected by the law, and relatively more so if employed in industries where employment protection legislation is more binding, i.e. in industries 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 IV 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.
1 :  Paris-Jourdan Sciences Economiques (PSE)
CNRS : UMR8545 – École des Hautes Études en Sciences Sociales (EHESS) – École des Ponts ParisTech (ENPC) – École normale supérieure [ENS] - Paris – Institut national de la recherche agronomique (INRA)
2 :  Ecole d'Économie de Paris - Paris School of Economics (EEP-PSE)
Ecole d'Économie de Paris
3 :  Laboratoire d'Economie de Dauphine (LEDa)
Université Paris IX - Paris Dauphine
4 :  Laboratoire d'Economie et de Gestion des Organisations de Santé (Legos)
Université Paris IX - Paris Dauphine
5 :  Centre de Recherche en Économie et Statistique (CREST)
INSEE – École Nationale de la Statistique et de l'Administration Économique
6 :  Laboratoire d'Economie de Dauphine - Economie de la mondialisation et du développement (LEDa - DIAL)
Université Paris IX - Paris Dauphine : EA4404
Sciences de l'Homme et Société/Economies et finances
Job insecurity – Health – Instrumental Variables
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wp201301.pdf(494.3 KB)