Transitioning into and out of precarious employment and life satisfaction: Evidence from asymmetric fixed effects models

Abstract

Previous studies have found that those with precarious jobs report lower levels of life satisfaction than those with non-precarious jobs. However, it is unclear whether transitioning into and out of precarious jobs has differential effects on life satisfaction. This study examines the association between employment status transitions and life satisfaction, as well as gender differences in these associations. Data from the Korean Welfare Panel Study (N = 9,792) from 2006 to 2020 were used in this study. A novel asymmetric fixed effects model was employed to separately estimate the association for transitioning into and out of precarious employment. Gender heterogeneity was estimated by including an interaction term of gender and employment transition. Standard fixed effects estimates showed that precarious employment is negatively associated with life satisfaction (b = −0.048). Asymmetric fixed effects models revealed that transitioning out of precarious employment is associated with increased life satisfaction (b = 0.051), while transitioning into a precarious job is not significantly associated with life satisfaction. These asymmetric associations were more pronounced for men than women. This study provides evidence that, especially for men, the association for transitioning out of precarious employment is significantly larger than the association for transitioning into precarious employment. Policies that facilitate the transition into stable employment are likely to enhance the quality of life for employed individuals.