Health inequalities in the workforce: the labour market core–periphery structure

P Virtanen1, V Liukkonen1, J Vahtera2, M Kivimäki2,3 and M Koskenvuo4

1 University of Tampere, Medical School, Finland.
2 Finnish Institute of Occupational Health, Finland.
3 University of Helsinki, Department of Psychology, Finland.
4 University of Turku, Department of Public Health, Finland.

Correspondence: Pekka Virtanen, Medical School, University of Tampere, 33014 University of Tampere, Finland. E-mail: pekka.j.virtanen{at}uta.fi


    Abstract
 Top
 Abstract
 Unemployment and health
 Precarious work and health
 Study question
 Material and Methods
 Results
 Discussion
 Conclusion
 References
 
Objectives To explore health inequalities between six labour market groups ranging from permanent employees to the long-term unemployed receiving minimum daily allowance.

Methods A sample of 15 468 employees or job seekers from a population survey. Their perceived health, diseases, and depression were measured.

Results Compared with permanent employees, the odds for poor health were highest among the unemployed with low incomes irrespective of adjustments, across all health indicators and in both men and women. High odds were also found among the less disadvantaged unemployed and the employed with atypical contracts, but not among fixed-term employees.

Conclusions Rather than between the employed and the unemployed, it seems that health inequalities prevail across different labour market groups within the employed and the unemployed. Future studies should employ a more detailed classification of employment situation.


Keywords Atypical employment, unemployment, depression, health status, inequality, Finland

Accepted 15 August 2003

The last decades of the 20th century saw two major changes in the labour markets of all Western societies, i.e. a sharp increase in the jobless rate and a breakdown of the traditional industrial structures, which began to give way to more diverse employment patterns. For a growing part of the workforce, post-industrial organizations have necessitated (or opened up an opportunity for) a career that involves more or less continuous movement between different occupations, work places, and job contracts, each with their sources of material and psycho-social well-being as well as distress and environmental health hazards. Frequent labour market passages also increase the probability of health-based selection.

The traditional division of the workforce into employed and unemployed is not sensitive enough to describe the ever greater complexities of modern working life. For the purposes of studying the associations between labour market status and health, we would need to have a more detailed analysis of employment situations. However, the simple dichotomy of unemployed versus employed does provide an adequate starting point for specifying the scope of this article.


    Unemployment and health
 Top
 Abstract
 Unemployment and health
 Precarious work and health
 Study question
 Material and Methods
 Results
 Discussion
 Conclusion
 References
 
Various indicators from behavioural risks through psychological distress to mortality have been used to establish the associations of unemployment with poor health.1,2 It seems that a complex set of causal and selective processes lies behind the health inequalities between the employed and unemployed populations.3–5 Psychological and physiological reactions may be even greater in the anticipation phase than after actual job loss.6 The onset of unemployment may comprise the stages of a traumatic crisis: adaptation mechanisms soon slow down the deterioration of both mental and physical health. Social support and safety nets —although their permeability varies even between different welfare states—prevent the majority of those without a paid job from falling into extreme material deprivation and psycho-social marginalization.7,8

The ‘industrial’ prototype of an unemployment episode with clear-cut exit from and re-entry to permanent work is rare. The spell of unemployment is often interrupted by various re-employment programmes or vocational training courses, resulting in a labour market status somewhere in the middle ground between genuine employment and genuine unemployment. Moreover, employment policy measures may blur the ‘natural’ process of health-based selection to and from unemployment, and the social and health care services provided may slow down the ‘natural’ deterioration of health.9,10 However, specific health effects may depend on ways in which these services are administered and perceived by the recipients,11,12 and on the level and conditions of unemployment benefits.13

In sum, figures on past unemployment provide only a relatively crude measure of ‘unemployment exposure’. Socioeconomic contexts and re-employment prospects are probably just as significant to the well-being of the unemployed as the corresponding factors and perceptions, i.e. job insecurity, are to employed individuals.14


    Precarious work and health
 Top
 Abstract
 Unemployment and health
 Precarious work and health
 Study question
 Material and Methods
 Results
 Discussion
 Conclusion
 References
 
Perceptions of job insecurity are common among employees with non-permanent contracts.15 In the post-industrial ‘flexible’ labour markets, the shrinking core workforce is surrounded by a widening field of precarious work between permanent jobs and overt unemployment.16,17 Precarious employment usually refers to specific types of job contract, such as fixed term employment, temporary wage workers, sole traders, and part time working.16 Such employment may have various socioeconomic disadvantages and psychological features with adverse health effects, and poor health may increase the risk of falling into a more precarious career.

The concept of job insecurity can be applied to both permanent and precarious jobs. However, most empirical research has relied on insecurity attributed to or perceived by permanent employees, also reviews on job insecurity18,19 have only mentioned briefly the question of employment security among fixed-term and other employees with unstable labour market status. The job insecurity concept and methods of assessing it should be developed to discern job-loss insecurity from job-feature insecurity,20,21 and even then there is reason to ask whether job insecurity is the best theoretical approach to understand the new workplace reality.22 Research on the associations between precarious employment and health is still scarce. Most of the few studies that have been published have compared permanent and fixed-term wage earners,15,23–25 but there are no unequivocal results.


    Study question
 Top
 Abstract
 Unemployment and health
 Precarious work and health
 Study question
 Material and Methods
 Results
 Discussion
 Conclusion
 References
 
The breakdown of labour market statuses along the core–periphery axis is a neglected issue in research on health inequalities among the unemployed and among employed people. We expect a robust association between unemployment and poor health, but suspect that in order to reveal the health-related divisions and processes in post-industrial working life a more detailed articulation of labour market statuses is required. To address this issue, we explore the health of the total workforce with reference to the relative hierarchy of different statuses, expecting that such analysis might reveal new health gradients between and within the unemployed and the employed work force.


    Material and Methods
 Top
 Abstract
 Unemployment and health
 Precarious work and health
 Study question
 Material and Methods
 Results
 Discussion
 Conclusion
 References
 
Setting and sample
The population sample is drawn from the first phase of the Health and Social Support project (HeSSup), a longitudinal cohort study on psychosocial factors and health in the Finnish working-age population. The study was launched in 1998, shortly after the Finnish economy had recovered from a deep recession. However, the jobless rate, which had reached a record figure of 16.6% in 1993, was still at 11.4%:26 it was clear that unemployment was no longer a cyclical phenomenon but an integral part of the labour markets. Large parts of the workforce were now involved in various re-employment programmes. Moreover, in the wake of the recession, the number of non-permanent jobs had increased: in 1993 10% of men and 15% of women had a fixed-term contract, in 1997 the figures were 16% and 21%.27

A random sample (n = 52 739) from the Finnish Population Register Centre, stratified according to gender and four age groups (20–24, 30–34, 40–44, and 50–54 years), were asked to participate in the HeSSup-project. A total of 21 101 people answered the baseline questionnaire. The response rate (40%) was satisfactory taking into account that the participants were asked to give their consent for access to several register data and to follow-up surveys. The participants recruited represented relatively well the age- and gender-adjusted Finnish population.28 The present study is based on the data obtained from this survey.

Respondents’ labour market status
This study comprises those 15 468 respondents who were at work or seeking a job. A set of questions concerning labour market status was used as criteria for inclusion in the study and for classification of status as follows.

1 A multi-choice question inquired about main activity in relation to work with 12 options. Those engaged in full time work (>=20 h/week), those getting earnings-related unemployment allowance (see below, including laid-off employees), and those getting basic unemployment allowance (see below) were included in this study, while students, pensioners, full-time mothers and fathers, and other non-working respondents were excluded.

2 Wage earners’ labour market status was further explored with a multi choice question which specified the following options: permanent, deputizing, or locum, fixed-term, subsidized, temporary (hired), freelance, probation, seasonal work, on-call work, apprenticeship, other non-permanent situation.

3 If there was any discrepancy between the previous items (e.g. unemployed in one and subsidized in another), a separate question (‘Are you currently unemployed or laid-off?’) was used to make the final decision on employment status.

On the basis of this set of questions the employed respondents were classified into three groups.

Permanent employees
Wage-earners with a permanent contract and all entrepreneurs, the self-employed, and farmers.

Fixed-term employees
Including deputizing, locum, and fixed-term employment, i.e. all those whose contract was going to expire at a given point in time.

Atypical employees
A residual group comprising temporary (hired), freelance, probation, seasonal, on-call, apprenticeship, and other non-permanent workers.

Further information requested from the employed respondents included spells of unemployment or lay-off during past 3 years and length of the employment in the current work place. The unemployed respondents were also classified into three groups.

Compensation-income unemployed
This category comprised the unemployed who were in receipt of earnings-related daily allowance. The system of earnings-related benefits is based on voluntary membership of unemployment funds collected during periods when people are working. The daily allowance depends progressively on income level prior to redundancy. Eligibility for earnings-related allowance continues for 500 working days, i.e. about 2 years. If this period expires, the employee will have to work for more than 10 months without interruption in order to regain eligibility.

Subsidy unemployed
This category comprises those respondents who reported that they were employed under a scheme to re-employ long-term unemployed job seekers. Eligibility for this scheme requires that the person has been out of work for a minimum of 12 months, but in most cases this will be a much longer period. Re-employment lasts for 6 months, and follow-up studies29 have shown that after this period more than 90% of the participants will remain out of work. In other words, although the subsidy unemployed are working, their labour market status of ‘interrupted unemployment’ is perhaps most appropriately described as a sort of unemployment.

Low-income unemployed
Job seekers who are not in receipt of earnings-related allowance are entitled to a basic allowance at a lower and fixed level. It is paid out under the national unemployment insurance scheme to all job seekers for unlimited time. Recipients of this minimum allowance form the ‘hard core’ of unemployment within the labour market structure studied. At the individual level this means a situation characterized by a low income level, several years of unemployment experiences, and poor prospects for re-employment.

Health indicators
Presented with a list of 26 chronic diseases and an option for ‘some other disease’, the respondents were asked to check ‘diseases diagnosed by a doctor’ (yes/no). A dichotomous variable (no disease versus at least one disease) was formed.

Self-rated health was classified as good (good or fairly good) and poor (average, fairly poor or poor) health.

Depression was assessed using the 21-item version of Beck’s Depression Inventory (BDI).30 This questionnaire has been established as a valid and reliable method for detecting depressed respondents. A dichotomous variable was constructed with the score >=10 indicating depression.

Background variables
In addition to gender and age group, other demographic variables included in the analysis were marital status (married or cohabiting versus not) and level of education (no vocational education, vocational school, college, university). The psychosocial factors measured were size of social network (small 0–10, intermediate 11–20, and large >20)31,32 and optimism-pessimism (three groups using Q1 and Q3 as cut-offs).33 Health risk behaviours were assessed on the basis of overweight (body mass index >27 kg/m2), alcohol intake (non-drinking, moderate drinking [1–175 g weekly in women and 1–263 g weekly in men] and heavy drinking), and smoking (non-smoking, daily smoking 1–19 cigarettes, daily smoking >=20 cigarettes).

Statistical methods
We used logistic regression analyses to study the association between employment status and health. The models were first adjusted for age, and then additionally for demographics, health risk behaviour, and psychosocial factors. Finally, all the background variables were controlled for in the fully adjusted model. Analyses were carried out separately for men and women. Gender differences in the associations between employment status and health were studied with P-values for interaction obtained from the regression models.


    Results
 Top
 Abstract
 Unemployment and health
 Precarious work and health
 Study question
 Material and Methods
 Results
 Discussion
 Conclusion
 References
 
Table 1Go shows that 72% of the respondents in this study were permanently employed, 11% had a fixed-term contract, 4% an atypical contract, 5% were compensation-income unemployed, 2% subsidy unemployed, and 6% low-income unemployed. Permanent employees were older and more often married, the low-income unemployed were least educated, and fixed-term employees most educated. Health behaviour and psychosocial factors showed no association with employment status, with just one exception: a small social network was most common among the unemployed participating in subsidy programmes.


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Table 1 Descriptive statistics (column percentages) for the participants according to labour market status
 
Among the employed respondents, in all 76% had no experience of unemployment or lay-off during the past 3 years. For the permanently employed the figure was 84%, for fixed-term employees 38%, and for atypical contract 27%. Two of three permanent employees had been in the current work place more than 5 years, whereas the career had lasted less than 2 years in almost two of three fixed-term and atypical contract employees (Table 1Go).

We started out by comparing the health of all the employed with all the unemployed participants irrespective of their specific labour market status. The demographics-adjusted odds ratios (OR) for poor health were 1.76 (95% CI: 1.47, 2.11) in unemployed men and 1.71 (95% CI: 1.46, 2.00) in unemployed women; the corresponding OR for chronic disease were 1.65 (95% CI: 1.40, 1.96) and 1.24 (95% CI: 1.09, 1.41), and for depression 2.89 (95% CI: 2.40, 3.47) and 1.51 (95% CI: 1.31, 1.75). As the latter figures indicate, the OR for depression was significantly higher in unemployed men.

A more detailed comparison with permanent employees revealed a health gradient over the spectrum of labour market statuses (Table 2Go). After adjusting for demographics, the highest odds for poor health were found in the low-income unemployed, irrespective of sex and the measure of health. Subsidy unemployed men suffered more often from depression, while their female colleagues suffered more often from poor self-rated health and chronic diseases. Among the compensation-income unemployed, men had elevated odds for chronic disease and depression and women elevated odds for poor self-rated health and depression. Employees in atypical jobs had more chronic diseases; women in this category also suffered from depression more often. No differences were found between permanent and fixed-term employees. Further adjustment for psychosocial factors and health risk behaviours had no effect on the associations between labour market status and health.


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Table 2 Odds ratios (95% CI) for poor self-rated health, self-reported chronic disease diagnosed by physician, and depression according to labour market status
 
With respect to depression, a significant interaction was seen between sex and type of employment. Unemployed men, irrespective of their type of unemployment, had higher odds than women (test for interaction with sex P = 0.014 for compensation-income unemployed and P < 0.001 for low-income and subsidy unemployed). It is particularly important to note the low OR for depression in unemployed women participating in subsidy programmes.

Finally, we assessed whether the enhanced measure of labour market status fitted the data better than the dichotomous employed versus unemployed measure. The -2 log likelihood tests indicated that this was the case both in women (P-values for self-rated health 0.001, for disease 0.016, and for depression <0.001) and in men (corresponding P-values 0.022, <0.001, and 0.024).


    Discussion
 Top
 Abstract
 Unemployment and health
 Precarious work and health
 Study question
 Material and Methods
 Results
 Discussion
 Conclusion
 References
 
In the flexible labour markets of post-industrial society, health inequalities do not necessarily follow the traditional division between employed and unemployed groups, but may also show a more complex pattern. This population-based study found gradient-like health differentials following the core–periphery stratification in the labour market. The first step of increased health problems was evident between fixed-term and atypical employees. A further step was observed between the unemployed receiving earnings-related allowance or participating in subsidy programmes, on the one hand, and the low-income unemployed receiving only basic daily allowance, on the other. The findings could not be attributed to differences in risk behaviour or psychosocial factors between labour market statuses.

Health differences among the non-permanent employees
Our findings are in line with an earlier investigation among Finnish municipal employees,15 which showed that fixed-term employees may have the same or fewer health problems than permanent employees. These results may indicate health-based selection in recruitment into fixed-term employment, although the healthiest fixed-term employees seem to be recruited into permanent posts.25 We cannot rule out the possible health damaging effects of long lasting fixed-term employment either. Rather, the result raises questions about well-being and health during the processes of entries into and exits from fixed-term and other non-standard jobs.

The health difference observed between fixed-term and atypical employees gives reason to argue that the health effects of precarious employment depend upon stability of the formal contract. All the multiple employment situations defined here as ‘atypical’ share in common relatively poor security, both with respect to job features and to job loss. Health-related selection into atypical jobs, both from fixed-term posts and from unemployment, may also contribute to health differentials. The majority of the non-permanent employees had relatively well regulated fixed-term contracts, and the more atypical contracts were rare. Leaving aside the evident socioeconomic advantages, this feature of the Finnish working life also seems to have health-related advantages.

Health differences among the unemployed
Although this study was carried out in a country with relatively high income replacement for the unemployed,34,35 psychosocial factors did not contribute to the association between unemployment and health. Instead of treating the unemployed as a single group or using a duration-based measure of unemployment, we distinguished between unemployed using income-based compensation, subsidized income, and fixed basic daily allowance, a measure sensitive to income differentials. The health effects of unemployment were strongest for those with greatest material disadvantage (unemployed with basic allowance). These findings are in line with the hypothesis of financial strain as a major source of poor health among the unemployed.36

In this study it is not possible to distinguish between causal and selective processes in the association between unemployment and health. Nonetheless, the fact that the subsidy and compensation-income unemployed are in relatively good health gives grounds to underline the importance of employment and social policy measures. The impacts of these measures are most clearly apparent with respect to depression, and particularly the non-elevated depression rates among women in subsidized work. This may also indicate a gender difference in the mental health promoting effect of these re-employment programmes. A recent study in the US showed a corresponding association with government entitlement benefits.37 It seems that the ‘interruption’ of unemployment less effectively alleviates the socioeconomic and psychological impact of unemployment among men. All in all, the highly significant gender difference in the association between unemployment and depression may indicate that men’s values are mainly work-oriented, while women may attach more importance to family and other spheres of life.

Our results showed poorest mental health in the long-term low-income unemployed. These findings, based on a dichotomized variable derived from Beck’s Depression Inventory, were confirmed by using a sum score measure. For instance, in permanently employed men the estimated marginal mean, adjusted as model 2 in Table 2Go, was 4.93 (95% CI: 4.64, 5.21), while the respective figure in the low-income unemployed men was 9.47 (95% CI: 8.64, 10.30). Many prior studies on unemployment and mental health have applied the General Health Questionnaire (GHQ)38 and found that the difference in psychological distress between the employed and unemployed partially wore off as the unemployment lengthened.36 A potential explanation for the contradictory findings might be that the GHQ measure, in contrast to the BDI, assesses ‘recent’ experiences, and indicates, in addition to depression, also other aspects of mental well-being, e.g. anxiety and social dysfunction.

Most participants in the subsidized re-employment programmes come from the low-income unemployed group, which also comprises individuals who are unable to work even as subsidized employees.39 Health-related selection mechanisms may also operate for entering re-employment programmes, as the odds for physician-diagnosed disease among subsidized men were relatively low. On the other hand, their ‘paradoxically’ high odds for poor self-rated health may reflect a situation where working in the subsidy programme after unemployment may reveal defects in participants’ functional capacity that furthermore affect their health perceptions.40

The basic allowance provides for no more than a minimal subsistence income, and there are more recipients of this type of allowance than those who recieve compensation-income benefits among the Finnish unemployed. Thus, the high prevalence of mental health problems seen in the former group is an alarming finding (e.g. 48% of the age group 40–44 years were trapped in Beck’s depression screen). The question of whether the high odds for disease is due to previous labour market disadvantages and occupational hazards rather than actual unemployment needs to be approached with longitudinal data in future studies. The 5-year follow-up data collected by the Health and Social Support project in 2003 will give opportunities to study the predictive associations of various labour market trajectories with employee health and well-being.

Methodology
The spectrum of employment statuses among the participants in this study represents quite well the respective groups in the Finnish labour force in 1998.21 Although not very high, the response rate in the initial survey of the HeSSup yielded enough responses for the analyses of the present study. Variations in the response rate according to labour market status or health may cause bias in comparison (e.g. depression causing more non-response among the long-term unemployed than among the permanently employed). However, the expected finding of poor health among the unemployed suggests that there is no major selection bias. Moreover, the consistent findings made across the whole range of outcomes—‘self-rated health’ which incorporates a variety of physical, emotional and personal components, ‘diseases’ which are an indicator of permanent health problems, and the BDI which reflects poor mental health more sensitively than the question about diagnosed psychiatric diseases—may be interpreted as lending support to the reliability of the comparative setting.


    Conclusion
 Top
 Abstract
 Unemployment and health
 Precarious work and health
 Study question
 Material and Methods
 Results
 Discussion
 Conclusion
 References
 
The significance of the macroeconomic context needs to be re-emphasized. Our study was carried out in a post-industrial labour market characterized by high unemployment, rapid economic growth, and increasing non-permanent employment. The results show that unemployment remains the major correlate of poor health in the workforce, but future research concerning working age people should also take into account the widening spectrum of employment situations and health inequalities within the workforce. Longitudinal designs are needed not only to describe the direction of effects, but also to provide evidence on the health promoting ‘side effects’ of employment policy measures, particularly the measures targeted at the most peripheral and disadvantaged members of the work force.


KEY MESSAGES

  • The health difference seen between employed and unemployed populations is also apparent during periods of concurrent rapid economic growth and relatively high unemployment.
  • Both within the employed and within the unemployed, more peripheral labour market status indicates greater health problems.
  • The labour market statuses of the employed and the unemployed should be defined in more detail in research as well as in planning employment and welfare policies.

 


    Acknowledgments
 
The HeSSup project is supported by grants from the Academy of Finland, the Yrjö Jahnsson Foundation, the Emil Aaltonen Foundation and the Gyllenberg Foundation. Pekka Virtanen and Virpi Liukkonen were supported by the Finnish Work Environment Fund (grant no. 101295), and Jussi Vahtera and Mika Kivimäki by the Academy of Finland (grant no. 77560) and the Finnish Work Environment Fund (grant no. 101190).


    References
 Top
 Abstract
 Unemployment and health
 Precarious work and health
 Study question
 Material and Methods
 Results
 Discussion
 Conclusion
 References
 
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