Type of Employment Contract and Subjective well-being

Abstract

Transformation of the industrial relations in the European countries is often associated with the expansion of various non-standard forms of employment, among which is temporary or fixed-term employment. Fixed-term contracts are associated with erosion of the existing social model, and can affect objective (like earnings and working conditions) as well as subjective (like satisfaction or feelings of stress) workers’ well-being. The focus of this study is the subjective well-being of those who have fixed-term employment contract in comparison with holders of the open-ended contract. Sociological research literature sees often temporary employment as “precarious” and “socially deficient”, and associated with a very low level of social well-being. This study tries to show that the relationship between the type of employment contract and subjective well-being is not simple and causal, and reflects the impact of confounding factors like the quality of human capital and the composition of jobs filled with temporary workers. This conclusion has important implications for economic and social policy. The empirical analysis exploits data from the European Social Survey (ESS, 2012– 2016) and looks at such dimensions as life and job satisfaction, social status assessment, psychological depression and anxiety, expectations of losing work and income over the next 12 months. The results indicate ambiguity of the effect of temporary employment on the subjective assessments. Different indicators respond differently to the type of contract. Workers with similar human capital and occupying comparable jobs tend to show comparable levels of present subjective well-being regardless of the contract type they possess. However, fixed-term contracts are more likely to generate depression, anxiety and uncertainty about future prospects.