Is temporary employment a cause or consequence of poor mental health? A panel data analysis

Summary

Mental
health status has an association with labour market outcomes. If people
in temporary employment have poorer mental health than those in
permanent employment then it is consistent with two mutually inclusive
possibilities: temporary employment generates adverse mental health
effects and/or individuals with poorer mental health select into
temporary from permanent employment. We apply regression analyses to
longitudinal data corresponding to about 50,000 observations across 8000
individuals between 1991 and 2008 drawn from the British Household
Panel Survey. We find that permanent employees who will be in temporary
employment in the future have poorer mental health than those who never
become temporarily employed. We also reveal that this relationship is
mediated by greater job dissatisfaction. Overall, these results suggest
that permanent workers with poor mental health appear to select into
temporary employment thus signalling that prior cross section studies
may overestimate the influence of employment type on mental health.