Marginal employment and health in Britain and Germany: does unstable employment predict health?
Introduction
For more than a decade, countries in the European Union have faced both high unemployment rates and an increase in the numbers of jobs offering fixed-term employment contracts. Countries with highly regulated labor markets have experienced rising unemployment rates, while those with less regulated labor markets have seen significant changes in the types of employment, employment-population ratios, as well as increases in wage inequality (Blank, 1995; Danzing & Gottschalk, 1995; Karoly, 1996; Burkhauser, Crews, & Daly, 1997).
There is mounting concern that fixed-term employment and other forms of marginal employment may exacerbate social inequality. Simultaneously, there is growing interest in studying the impact of adverse working conditions on health (Karasek & Theorell, 1990; Marshall, Barnett, & Sayer (1993), Messing, Dumais, & Romito (1995); Marshall, Barnett, & Sayer, 1993; Barnett, 1994; Marmot, Bosma, Hemingway, Brunner, & Stanfeld, 1997).
The main objective of this study is to investigate whether forms of marginal work arrangements predict perceived health status. Specifically we investigate the following research questions: (1) Are employed people with a fixed-term contract or no contract more likely to report poor health than those who hold jobs with permanent contracts? (2) Are part-time employed respondents (even when they hold jobs with permanent contracts) more likely to report poor health than full-time workers? (3) Does change in employment stability (i.e., from employment with permanent contract to fixed-term or no contract employment and vice-versa) have an impact on health status?
As defined in this study, the term “marginal employment” includes several working situations. One form of marginal employment refers to flexible and unstable employment. This includes employment in which individuals work with fixed-term contracts that expire at a certain predetermined date, individuals who are employed without a formal contract, and those who hold a casual or seasonal job.
The second form of marginal employment refers to part-time employment. Part-time work represents an important proportion of total employment in most countries, and it is often referred to as non-standard or atypical work in the economic literature. Here, we include this form of work in our definition of marginal employment, because there is considerable concern about both part-time and fixed-term employment offering fewer financial and career benefits, as well as less employment protection than standard full-time employment (O’Reilly & Schmid, 1999). In addition, both full-time and part-time employment can occur with permanent contracts, with fixed-term contracts, or without a contract. In the European countries studied here, employment with permanent contract (i.e., contracts that do no have an expiration date) is the most frequent form of employment.
We decided to study Britain and Germany for several reasons. Besides the availability of panel data, they both have universal health coverage and a strong social safety net. However, they offer a contrast in the degree of regulation of the labor market.
Within a tradition of Christian democratic political economy, Germany has given more importance to the role of labor market policy and has allowed a greater development of the welfare state than the United Kingdom, where liberal Anglo-Saxon policies have traditionally relied on more liberal market principles (Navarro, 1999). In general, Germany collects more taxes and spends more in social security than the United Kingdom. According to Smeeding (1997), during 1990–1991, the impact of taxes, fees, and social transfers reduced the number of people living under the poverty level from 22 to 7.6 per cent in Germany, and from 29.2 to 14.6 per cent in the United Kingdom. Nevertheless, post-government income inequality in Germany is increasing, and Burkhauser, Butler, and Houtenville (1998) suggest that this inequality is caused by fundamental changes in the German economy.
In both countries, the context for employment and work is changing and it has been suggested that new work relationships may produce unstable forms of employment (Schoman, Rogowski, & Kruppe, 1998). Indeed, unemployment may have long-term consequences as when reintegration into the labor market does not result in stable employment (Kruppe, 1999). In Germany, studies have shown that fixed-term employment and social inequality are not associated in a linear way. While fixed-term contracts in positions that demand high qualifications can result in comparative income gains, in lower and medium positions fixed-term employment can lead to comparatively low income (Gross, 1999). Gross found that educational credentials have a lower return in fixed-term employment, that unqualified workers have the highest risk of being in fixed-term employment, and that women in East Germany have a higher risk than men of getting temporary contracts.
The participation of women in the labor market has slightly increased between 1989 and 1996 in both Germany and the United Kingdom (Mishel, Bernstein, & Schmitt, 1998, Chapter 8). The lower work participation of men in Germany (60.1 per cent) than in Britain (65.9 per cent) is partly due to labor market policies facilitating early retirement of workers, as well as young people spending more time in education and training (O’Reilly & Schmid, 1999).
During the last decade, part-time employment has grown in both countries, representing 24.6 per cent of total employment during 1996 in the United Kingdom, and 16.5 per cent of total employment in Germany. The possible marginalizing effects of part-time work have been studied extensively (Buchtemann & Quack, 1990; O’Reilly & Fagan, 1998). Lower hourly wages and fewer fringe benefits are salient consequences of part-time employment (Mishel et al., 1998, Chapter 8). Part-time workers have fewer opportunities to be hired for or promoted to higher-level jobs (Blau, Ferber, & Winkler, 1998; White, 1983).
In general, women have more employment instability than men. Furthermore there is no evidence that part-time jobs increases the probability of women moving into full-time employment overtime (Blank, 1994; Rodriguez, 2000). In fact, a strong pattern of transition from female part-time work to non-employment has been observed both in Germany and the United Kingdom (Bothfeld & O’Reilly, 2000). It is well established that women tend to engage in more part-time employment to accommodate domestic demands over the life course (Yu & Moen, 1997; Houseman & Osawa, 1998). However, considerable debate surrounds the role of individual choices to explain part-time work over the life cycle, and the impact of environmental constraints in channeling women into that type of employment (Bruegel & Humphries, 1998; Laufer, 1998).
The health effects of economic insecurity have been widely analyzed, and adverse health outcomes have been shown to be associated with an increase in unemployment levels.1 Research has also shown that persons in poorer health are more likely to lose their jobs, while persons in better health are more likely to be re-employed (Elkeles & Seifert, 1993; Riphanhn, 1996). While many epidemiological studies have shown that unemployment preceded adverse health effects, the influence of a selection process cannot be disregarded (Mechanic, 1998). Comprehensive reviews in this area of research are readily available (e.g., Jin, Shah, & Svoboda, 1995; Kasl, Rodriguez, & Lasch, 1998).
Considerable research has focused on the health impact of job characteristics, such as the amount of decision latitude and psychological workload (e.g. Karasek et al., 1988; Tsutsumi, Theorell, Hallqvist, Reuterwall, & Faire, 1999), and stress and workload in general (e.g., Kasl, 1998; Lundberg & Frankenhaeuser, 1999). The relationship between work, social class and health has also been studied (e.g., Johnson & Hall, 1995; Muntaner & O’Campo, 1993). Recently, researchers studied the health effects of new employment patterns including outsourcing and a resurgence in home-based business, (e.g., Mayhew & Quinlan, 1999), the health impact of using new technology and working overtime (Kawakami, Araki, Takatsuka, Shimizu, & Ishibashi, 1999), and the psychological and medical consequences of being employed but not in a preferred occupation (Aronsson & Goransson, 1999). However, the issue of whether unstable employment (including fixed-term and no contract employment) has an impact in predicting health outcomes has been addressed less frequently.
In a survey of managers and employees from 20 business in the UK, Burchell and others (1999) found a significant relationship between feelings of job insecurity and stress as indicated by the General Health Questionnaire (GHQ). More importantly, the researchers found that employees do not adapt well to insecurity over a long period of time, and that stress problems increase incrementally the longer that employees are subject to stress. In a recent analysis of a longitudinal cohort of white-collar British civil servants Castells (1998), Ferrie and her collaborators (1998 (2001) found that job insecurity was associated with some adverse physiological changes.
As a result of the increasing flexibility of the production system and job insecurity over the last decade (Castells, 1996; OECD, 1998), the need to study job insecurity and its possible health effects is now more timely than ever. Researchers acknowledge the fact that “the frontier between many types of flexible employment and unemployment is becoming blurred” (Benach, Benavides, Platt, Diez-Roux, & Muntaner, 2000). Indeed, our knowledge of the possible health impact of unstable and flexible forms of employment is very limited.
In terms of part-time employment, research has documented the effects of health status on hours of work specially among men (Muntaner & Parsons, 1996). In a comprehensive review of the literature Currie and Madrian (1998) concluded that health has greater effects on the number of hours worked than on wages. However, the question of whether part-time employment has beneficial or detrimental health effects remains unanswered. In general, it has been noted that combining paid work with responsibilities related to home and family reduces the benefits of employment for women (Lundberg & Frankenhaeuser, 1999), and increasing employment demands on young parents have an impact on quality of life (Moen & Yu, 1999).
In this study we hypothesize that the possible protective health effects of employment security and permanent work contracts should be seen in both groups of full-time and part-time employed people.
Section snippets
Methods
The latest three years of panel data (1991–1993) available from Britain and Germany in the Household Panel Comparability Project (PACO) data base (Schmaus & Riebschlager, 1997) are analyzed. PACO (a project funded in part by the European Commission) is a harmonized and standardized micro-database created from existing longitudinal studies on household living conditions. The German data come from the ongoing Sozio-Oekonomisches Panel (SOEP), and the United Kingdom data come from the British
Results
Table 1 displays a description of Britain and German variables used in the analysis according to employment status in 1992. The total percentage of respondents reporting good or excellent health is similar in both countries, slightly higher in Britain. The British sample includes about 50 per cent more separated or divorced people than the German data. The majority of respondents in Britain (73 per cent) report being house-owners, in contrast with only 39.1 per cent in Germany. Regarding
Challenges and limitations
This study has certain limitations. It relies on self-report data, and sources of error associated with these data are well known to investigators in the field. We reduced the possible effects of reverse causation by using prospective longitudinal data. Nevertheless, people who work full-time with permanent contracts may differ in significant ways from people with other types of contracts, and these differences may not be fully controlled for in the background covariates used in the analysis.
To
Acknowledgements
A research award from The Alexander Von Humboldt Foundation made possible this study during a research stay at the Social Science Research Center Berlin (WZB). The research was co-funded by a grant of the European Commission, TMR Programme, Access to Large Scale Facilities, and hosted by IRISS-C/I at CEPS/INSTEAD, Luxembourg.
I would like to thank Guenther Schmaus for his assistance with the PACO data base, and June Mead, Carles Muntaner, Rolf Rosenbrock, Guenther Schmid, Frank Young, and two
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