The Paradox of Job Retention Schemes: A Latent Growth Curve Modeling Approach to Immediate and Prolonged Effects of Short-Time Work on Job Insecurity and Employee Well-Being

Abstract

Many countries rely on short-time work to prevent mass layoffs in economic crises. Despite serving to protect jobs, short-time work may trigger job insecurity perceptions, which may impair employee well-being. Moreover, past experiences of unemployment may increase susceptibility to job insecurity in response to short-time work. Drawing on Conservation of Resources (COR) Theory, Appraisal Theory and temporal stressor-strain models, this study investigates effects of short-time work on the development of job satisfaction, life satisfaction and affective well-being via perceived job insecurity across 6 years, considering previous unemployment as a moderator. We used propensity score matching to account for selectivity into short-time work and calculated latent growth curve models with N = 1211 employees in Germany (619 affected by short-time work, 592 controls). Short-time work predicted higher levels and an immediate increase in job insecurity, followed by a decrease over time. Both levels and changes in job insecurity were associated with levels and changes in well-being. Indirect effects of short-time work on well-being via job insecurity persisted 2 years after short-time work. We found no difference between previously unemployed respondents and others in their reactions to short-time work. The findings support COR theory and a prolonged stress-reaction model, showing lingering effects on well-being via job insecurity even after short-time work ends. The study supports short-time work as an antecedent of job insecurity and reveals temporal dynamics between job insecurity, its antecedents and outcomes over time. When implementing short-time work, employers should aim to mitigate concerns about job security to protect employee well-being.