Job Insecurity and Financial Distress

Abstract

This paper investigates the effects of different job categories on households' likelihood of experiencing financial distress. Given imperfect financial markets and the absence of unemployment subsidies, households with less secure jobs are likely to experience drops in income more frequently than households with well-protected jobs. Households' abilities to deal with financial decisions (i.e. financial literacy) can mitigate these problems. Our results suggest that greater job insecurity increases the probability of being in financial distress similarly than other working statuses (e.g. unemployment), and in some cases even more (i.e. part-time workers). However, a high level of financial literacy can counterbalance this effect, especially for atypical workers.

The Effects of Job Insecurity on Employees’ Financial Well-Being and Work Satisfaction Among Chinese Pink-Collar Workers

“…The structural equation modeling results indicated that job insecurity negatively and significantly influenced employees' personal FWB whereas work satisfaction was affected by employees' personal FWB directly and indirectly via employees' family FWB. The results supported the general notion that job insecurity leads to financial stress/distress (Barazzetta et al, 2015;Giannetti et al, 2014;Rajani et al, 2016). They also supported Kim et al's (2006) remarks that financial stress affects employees' work satisfaction.…”

“…Inevitably, many people have a strong feeling of job insecurity (Shoss, 2017). Based on responses from more than 7,700 households and 19,000 family members in Italy, Giannetti et al (2014) reported that job insecurity could lead to financial distress (or stress), which was more pronounced for those people who were employed on a parttime basis. The relationship between job insecurity and financial stress was found to be partially mediated by FWB (Choi et al, 2020).…”

Job insecurity, financial threat and mental health in the COVID-19 context: The buffer role of perceived social support

“…Financial threat is an emotional state which refers to “self-reported fearful-anxious uncertainty regarding one’s current and future financial situation” [35, p. 129; see also [7]. Financial threat perception, or financial distress, is usually associated with people or households that experience job insecurity when their jobs are less secure and have low protection against unemployment [36], and the data confirm that the financial threat is higher for people who experience a large number of economic difficulties in their daily life [37]. Economic difficulties can also become a chronic stress situation in families which can generate distressing thoughts about paying household expenses, and leads to feelings of fear, anxiety and uncertainty regarding one’s ability to maintain the current standard of living [7, 35].…”