Getting Laid-Off May Lead to Early Death -- But There Are Ways to Cushion the Severe Health Impact of Job Loss

By Tom Jacobs, Miller-McCune.com. Posted July 1, 2009.

Burgard, who has done her own research along these lines, agrees. "Job instability is OK for some people, but not for others," she says. "If you're an IT guy and you have a high educational degree, part of being successful is jumping from firm to firm. That's how you increase your income.

"But the type of workers we tend to see here in Michigan, who aren't necessarily highly educated, are facing a really tough road. I think people have been focused on the economic payoff (of a more flexible economy where jobs appear and disappear), but are less aware of the potential costs in terms of worker health."

Economists tend to argue that the flexibility to hire and fire workers as needed ultimately makes the economy more productive, and increases overall wealth. If that's actually true, it would have public health benefits. As healthcare economist Jason Shafrin argued in 2007, the concept of "creative destruction" -- that is, a dynamic economy where innovation leads new companies to rise and old ones to adapt or die -- "has decreased average mortality for individuals all over the world due to rising living standards."

In their latest paper, published in the American Economic Review in May, Sullivan and von Wachter present evidence that cuts both ways. They report the association between income and mortality is far stronger than was thought earlier. If the ever-churning economy produces more higher-paying jobs, those able to land one of them likely will see a positive impact on their health.

But the economists also found workers who lose their jobs -- and cannot find another quickly -- tend to suffer large earnings losses and go through a period of income instability. This is a big concern, since "higher variability of earnings is associated with increased mortality."

"You're looking at two people, both with the same long-term earnings," says von Wachter. "The one with the more volatile earnings dies earlier. Certainly, this is interesting evidence."

Like many economists, von Wachter isn't certain that the public perception that jobs and incomes are less stable than they once were is accurate. But he has no doubt that "sweeping restructuring" is going on in a number of industries, and workers in those sectors are experiencing health-sapping stress.

"This we can say: The large number of people being laid off in this recession will be subject to higher earnings volatility, and that will likely affect their mortality."

This is still more bad news for the former employees of General Motors and Chrysler, but what about workers at, say, Ford? Their company hasn't gone bankrupt, but they're fully aware that the industry is on shaky ground, and there are no guarantees their jobs will exist in a year. Using data from two nationally representative samples -- the Americans' Changing Lives and Midlife in the United States studies -- Burgard and two colleagues looked at people in that precarious situation for a July 2008 Population Studies Center research report.

Their study (to be published later this year in the journal Social Science and Medicine) concluded that "among people who are currently employed, those who have been persistently worried about losing their jobs have significantly worse self-rated overall health than those who haven't been consistently worried." Strikingly, these worried workers "are worse off than people who have had a job loss in the past few years, but are currently re-employed."

That makes perfect sense to psychologist Sheldon Cohen of Carnegie Mellon University, one of the nation's leading researchers on the relationship between stress and disease.

"There is a fair amount of evidence that expecting a major stressor is often worse than the actual occurrence of the stressor," he says. "My understanding is people who lose their jobs and get new ones pretty quickly don't show many of these effects. That's consistent with what we know about stress in general. Generally, the longer the stressor lasts, the greater the risk you are under for various diseases."

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Tom Jacobs is a veteran journalist with more than 20 years experience at daily newspapers. He has served as a staff writer for the Los Angeles Daily News and the Santa Barbara News-Press. His work has also appeared in the Los Angeles Times, Chicago Tribune and Ventura County Star.

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