Job Losers’ Wellbeing: Integrating Psychological Contract and Conservation of Resource Perspectives

Abstract

Although there is a consensus in the literature that layoff can be viewed as a form of psychological contract (PC) violation, research is yet to examine how such violation impacts layoff victims’ wellbeing outcomes including life satisfaction, sleep quality and psychological distress. Integrating psychological contract theory and the conservation of resource theory, we hypothesized a dual-stage moderated mediation model in which PC violation resulting from layoff is associated with three dimensions of layoff victims’ wellbeing via worry. This indirect effect is proposed to be conditional on the level of social support received. Based on a sample of 252 layoff victims, we found support for the dual-stage moderated mediation model in which the association between PC violation and the three dimensions of wellbeing via worry was weak for layoff victims reporting high levels of social support. Findings contribute to our understanding of how PC violation is associated with nonwork outcomes.