Job insecurity and mental health in Canada

Using six cycles of Canada's longitudinal National Population Health Survey data (2000-2001 to 2010-2011), this article examines the relationship between job insecurity and mental health. Job insecurity is evaluated in both subjective (perception of job insecurity) and objective (probability of joblessness) terms while mental health is measured using a standardized psychological distress index. Applying a person-specific fixed-effects estimator, results indicate that for males and females age 25-64, job insecurity, regardless of how it is measured, is associated with an increase in psychological distress. Results regarding unemployment are not as conclusive, suggesting that it is not so much the actual occurrence of job loss but the threat of unemployment that is associated with higher psychological distress. Estimates of the relationship between job insecurity and psychological distress using pooled ordinary least squares are much larger, implying that much of the psychological distress/job insecurity correlation may be due to unobservable fixed characteristics. All results are robust to the inclusion and exclusion of a host of other potential determinants including income-related variables, education, and various health measures.