Is Precarious Employment Bad for Worker Health? The Case of Zero Hours Contracts in the UK

29 Pages Posted: 13 Apr 2020

See all articles by Egidio Farina

Egidio Farina

Queen's University Belfast

Colin P. Green

Department of Economics

Duncan McVicar

Queen's University Belfast; Queen's University Belfast - Queen's Management School

Abstract

The increasing numbers of workers in employment with little to no job security, so-called precarious employment, has led to a range of concerns over worker outcomes. A particular focus is the effect of instability on health in general, and particularly, mental health. We provide new evidence on this, focusing on an extreme form of precarious employment that has grown rapidly in the UK, zero-hours contracts (ZHCs). We demonstrate that workers employed on ZHCs are more likely to report a long-lasting health problem than workers employed on other types of contract. In particular, reported levels of mental ill health are higher (almost double) among ZHC workers than for other workers. These associations remain, and a positive association between ZHC employment and physical ill health emerges, after controlling for a rich set of observable characteristics. Estimated associations vary little between different demographic groups, although they are concentrated in parts of the economy where underlying job instability is likely to be higher. Finally, we exploit sectoral variation in the historical prevalence of ZHC-like employment, in an instrumental variables framework, to demonstrate large and potentially causal effects of ZHC employment on reporting a long-lasting health problem and on mental ill health, but no effect on physical health. It is unlikely that these effects are currently factored into short-term employment conditions or that they attract compensating wage differentials.

Keywords: zero hours contracts, atypical employment, precarious employment, casual employment, health, mental health, instrumental variables

JEL Classification: J21, J48, M55

Suggested Citation

Farina, Egidio and Green, Colin P. and McVicar, Duncan, Is Precarious Employment Bad for Worker Health? The Case of Zero Hours Contracts in the UK. IZA Discussion Paper No. 13116, Available at SSRN: https://ssrn.com/abstract=3573286

Egidio Farina (Contact Author)

Queen's University Belfast ( email )

25 University Square
Belfast, BT7 1NN
Ireland

Colin P. Green

Department of Economics ( email )

Høgskoleringen
Trondheim NO-7491, 7491
Norway

Duncan McVicar

Queen's University Belfast ( email )

25 University Square
Belfast, BT7 1NN
Ireland

Queen's University Belfast - Queen's Management School

Riddel Hall
185 Stranmillis Road
Belfast, BT9 5EE
United Kingdom

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