Impact of Re-Employment on Psychological Distress among Long-Term Unemployed

Impact of Re-Employment on Psychological Distress among Long-Term UnemployedAuthor(s): Knut HalvorsenSource: Acta Sociologica, Vol. 41, No. 3 (1998), pp. 227-242Published by: Sage Publications, Ltd.Stable URL: http://www.jstor.org/stable/4201084 .

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ACTA SOCIOLOGICA 1998

Impact of Re-employment on Psychological

Distress among Long-term Unemployed

Knut Halvorsen

Faculty of Economics, Local Public Administration and Social Work, Oslo

College, Oslo, Norway

ABSTRACT This article reports results from a two-wave panel study representative of long-term unemployed in Norway in 1991-92. We looked especially at the impact of re-employment on psychological distress. Is any job better than unemployment, and does re-employment improve mental health dramatically? Our findings showed that re-employed people did not have less distress than those still unemployed and outside the labour force when other factors were controlled for. What mattered was that re-employment represented a secure job. High risk of distress was especially persistent among those who experienced financial hardship and marital break-up and who had not had previous psychological distress. Women exhibited higher distress than men, and older persons higher distress than younger. To a certain extent, psychological distress was unrelated to the unemployment situation itself, but seemed instead to be due to a selective process ending in long-term unemployment experienced by persons with psychological distress at the outset of joblessness. These persons experienced cumulative problems related to poor economic situations and marginal positions in the labour-market. Earlier research has tended to overestimate the emotional damage created by job loss per se and the beneficial effects of re-employment.

Knut Halvorsen, Flesdsvn. 2, N-0860 Oslo, Norway ? Scandinavian Sociological Association 1998

1. Introduction

Many studies have shown that unemployed people have poorer mental well-being than

employed people (see Lahelma 1989; Fryer 1992; Colbjornsen et al. 1992; Gershuny 1994; Halvorsen 1994; Claussen 1994; Wine- field 1995; Aim 1997). Chen et al. (1994) found that persons who experienced recurrent

unemployment had lower subjective well-being than those who were employed. However, the association between unemployment and health is not a clear-cut causal one. Unem-

ployment can be both the cause and the effect of poor mental health. In many studies of links between unemployment and various measures of mental health, there is often an unspoken assumption that unemployment is the cause of

poorer mental health (Lenkerd 1995). There exists also a consensus among many researchers that this form of causation has been demonstrated beyond reasonable doubt (Wine- field & Fryer 1996).

In cross-sectional studies, however, there often appears to be a tendency to overlook what can be understood as the drift or health selection hypothesis, i.e. the effect of selecting persons with prior poor mental health into the pool of the long-term unemployed. As shown

by Mastekaasa (1996), there are processes of differential selection into unemployment and out of employment. Specifically, this means that persons with health problems have a

higher probability of job loss and a lower

probability of getting work after job loss. Asso- ciations between unemployment and psychological distress are also distorted by the fact that unemployment is often associated with

low-paid marginal jobs (Daniel 1990). Persons in such situations have a cumulative disadvan-

tage of unemployment and insecure employment (Bartley 1988; Burchell 1994).

The purpose of this article is to describe and explain changes and variations in psychological distress among the long-term unemployed. It draws on the results of the first



228 ACTA SOCIOLOGICA 1998 VOLUME 41

panel study in Norway, using an initial sample representative of the long-term unemployed, both men and women. The particular focus of this research involves assessing the inde-

pendent influence of employment status (re- employment) on psychological distress

separately from earlier psychological distress, financial hardship and other stressful life events such as marital break-ups. Our point of

departure here has been Marie Jahoda's (1981) contention that even a bad job is better than unemployment.

2. Theoretical framework

Ezzy (1993) differentiates between divestment

passages and integrative passages, which he sees as being on a continuum: 'Job loss leading into unemployment is clearly a divestment

passage more than an integrative passage, while for example being re-employed or a student is a re-integrative passage' (1993:48). Psychological distress, according to some theories of identity, can be seen as a product of the failure to find meaning (Ezzy 1993). Therefore, a divestment passage results par- tially in the disruption of strategies designed to sustain a consistent and positive self-image. Failure to sustain a meaningful life can result in lowered self-esteem. This can happen when a person suffers a role loss and she/he sees no alternative role in which to fulfil self-defini- tional goals (Oatley & Bolton 1985). Self-

reported indicators of psychological distress are thus products of a social process, such as the meanings individuals give to their objective social relationships (Ezzy 1993).

In Jahoda's theory of deprivation, the loss of the latent functions of work is stressed, while the loss of its manifest functions (especially income loss) is regarded as less important (Jahoda 1982). This theory is based on a normative and functional theory about the

importance of work. According to Jahoda, the latent functions of work are time structure, social contact, goals and purposes, personal status and enforced activity. It is therefore reasonable to assume that the mental health of

unemployed people improves when they become re-employed. Several studies have found empirical evidence of such improvement (Vinokur et ai. 1987; Kessler et al. 1989; Bol- ton & Oatley 1987; Verklej 1989; Lahelma

1989; Iversen 1990; Claussen et al. 1993). It has even been suggested that the detrimental

effects of unemployment on mental health are reversible, and that the re-employed experience a dramatic improvement in their mental health (often to pre-unemployment levels) as

compared with those who continue to be un-

employed (Warr & Jackson 1985; Liem 1987; Kessler et al. 1989; Lahelma 1989). One recent study indicating a complete recovery from poor mental health when re-employed supports the causation hypothesis (Claussen 1994).

One major weakness with Jahoda's theoretical approach, apart from neglecting the income loss usually accompanying unemployment, is that the only perceived difference between a working person and a non-working person is that the former has a job and the lat- ter has not (Lunde & Borgeraas 1987). It

ought to be obvious, however, that unemployment is much more than non-employment.

According to Peter Warr's vitamin model, nine features of the environment can result in

poor affective well-being for persons either in

paid work or unemployment. One of these features is 'availability of money'. Other determinants of mental health are 'opportunity for

control', consisting of two elements: 'the

opportunity to decide and act in one's chosen

way' and 'the potential to predict the conse-

quences of action'. Additional determinants are Opportunity for skill use', 'externally generated goals', 'variety', 'physical security', 'environmental clarity', 'opportunity for inter-

personal contact' and 'valued social position'. In Warr's model, Jahoda's latent functions are identical with 'externally generated goals', 'opportunity for interpersonal contact' and 'valued social position' (Warr 1987:183).

Psychological difficulties, however, do not

necessarily right themselves with re-employment. This may be due to the aftermath of previous spells of unemployment (Fineman 1987). Fagin (1979) maintains that there could be lasting personality changes as a result of prolonged unemployment. For example, feel-

ings of low self-esteem can persist even after

re-employment (Kaufman 1982). Other researchers have maintained that returning to

paid work can be distressing after longer periods of unemployment (Liem & Liem 1988). However, earlier studies on the impact of the transition from unemployment to work have indicated improvements in mental health over time (Winefield & Tiggemann 1990). This, however, is not always the case - especially if the job is unsatisfactory. If a re-employed per-



Re-employment and psychological distress 229

son feels that the present job is not as good as the previous one(s), she/he does not necessa-

rily experience a reduction in distress level. It has been found that an unsatisfying job after an unemployment spell is associated with psychological distress, and that unsatisfying work can be a more important source of health dis- orders than being unemployed (O'Brian & Feather 1990; Graetz 1993; Winefield 1995). An exception to this, however, is found in another study (Kessler et al. 1989). Some researchers have maintained that persons most vulnerable to unemployment are also those most likely to experience 'poor quality' employment (Cullen et al. 1987). For those

experiencing discontinuity in their occupational career or loss of social status, re-employment is not a re-integrative status passage; thus psychological distress is maintained.

Emotional recovery appears to be dependent on the nature of the new job (Shamir 1985). Psychological benefits of re-employment can be reduced by the insecurity of the

jobs obtained (Rodgers & Rodgers 1989; Burchell 1994). Insecurity about the future is maintained if the new job is regarded as insecure (Kasl & Cob 1982; Beale & Nethercott 1985; Fryer & McKenna 1987; Bartley 1987; Burchell 1994). It has also been found that the threat or anticipation of unemployment may be as stressful as unemployment itself

(Kasl & Cobb 1982; Kessler et al. 1989). Espe- cially in times of high unemployment, as when our study was carried out in 1991-92, job insecurity becomes potentially much more

threatening (Burchell 1994). According to Warr (1987), an important aspect of environmental clarity is the degree to which a person is able to forecast what is likely to happen. In this respect, job insecurity has been found, in

many studies, to be a primary source of tension and stress. Job security and satisfactory working conditions thus seem to be precondi- tions for improvement of mental health after

unemployment (Dooley et al. 1987; Burchell 1994; Gershuny 1994).

Burchell's empirical findings (1994) do not support the hypotheses that can be formu- lated from Jahoda's theory. Instead, these find-

ings provide support for Warr's vitamin model, i.e. working people experiencing downward

mobility have mental health just as poor as that of the unemployed (Burchell 1989). The

perspective thus appears far too narrow, creat-

ing a dichotomy between employment and

unemployment (Fryer 1992; Chen et al. 1994;

Winefield 1995). Therefore, in our analyses of the data we chose to differentiate between various categories of re-employed, unemployed and those outside the labour force. In line with

Ezzy (1993), we regard unemployment not as a static experiment, but as a process where job loss and re-employment are both status passages. Consequently, rather than comparing the unemployed and employed, we examine 'careers of cumulative episodes of stressful,

psychological sub-standard employment, quasi-employment, unemployment and non-

employment' (Fryer 1995). Further, it seems that Jahoda overlooked

the importance of both material deprivation, which could be the outcome of income loss caused by unemployment, and subsequent financial constraint, which could give rise to a reduction in subjective autonomy (Warr 1987). Using agency theory as a starting point, the ability to cope with unemployment may be understood as dependent upon the

availability of money. The importance of this factor is drawn from Fryer's agency restriction

theory (Fryer 1986, 1992), which suggests that the restrictions imposed by economic

deprivation make it difficult for people to plan and to organize for the future. Lack of money reduces individual autonomy and the ability to maintain an established lifestyle. Low levels of affective well-being are significantly associated with worries about money (Payne et al.

1983). In most unemployment studies, it has been found that shortage of money is the

greatest problem and an important cause of

personal and family problems (Broman et al. 1990; Vinokur et al. 1987; Price et al. 1992; Halvorsen 1994, 1997a). The importance of economic distress has also been found in other studies (Kessler et al. 1987; Feather 1992; Whelan 1992; Ensminger & Celentano 1990; Viinamaki et al. 1993;Winefield 1995; Win- kelmann & Winkelmann 1995; Starrin et al. 1996; Strand 1997).

Unemployment is not the only divestment

passage with harmful results. Marital dissolution is another example of a status passage associated with poor mental health (Ezzy 1993; Mastekaasa 1993). Marital dissolution often means that the unemployed person loses the social support of a partner as well as

experiencing a diminished social network, both of which could impact negatively on mental

well-being. Therefore, in researching these areas, it is important to control for other

changes, which can occur during unemploy-




ment, and which can be unrelated to the

unemployment situation itself. Earlier studies on the consequences of

unemployment found sex differences (Komar- ovsky 1940), while later studies show some

divergence (Baik & Hosseini 1989; Ensminger & Celentano 1990; Schaufeli & van Yperen 1992; Leeflang et al. 1992; Mirowski & Ross

1995). It has been demonstrated that respondents with an unemployed spouse (both men and women) are at greater risk of psychological distress, even when controlling for the effect of financial hardship and other factors. One plausible explanation is that moderating effects of social support on psychological distress (Winefield 1995) are less likely to occur if a person's partner is also unemployed. In addi-

tion, with both partners unemployed, tension within the family could arise more easily, for

example, because of arguments about money or both unemployed partners being confined to the home.

3. The data set and research design

Data, sampling and attrition The data analysed here are drawn from a two- wave panel survey among the long-term unemployed carried out by the Norwegian Bureau of Statistics in 1991-92. In Norway, unemployed people registered for more than six months are regarded as long-term. The sur-

veys were conducted by personal interviews

and, in a few instances, by telephone inter-

views, all carried out by trained interviewers

employed by Statistics Norway. The sample consisted of 1,000 persons in the age group 20-59 years old. It was drawn in February 1991 (tO) and was regarded as representative of the country as a whole. It was a stratified

sample, where 70 per cent had been registered at the Norwegian Employment Office for six months or more, while 30 per cent of the sam-

ple consisted of people enrolled in labour-market programs who had been registered as

unemployed for six months or more. In the total number of unemployed registered at that

time, those experiencing joblessness for six months or more represented a proportion of 42 per cent. There was thus an oversampling of the long-term unemployed in the survey. It has to be mentioned, however, that those enrolled in labour-market programs had had

earlier experiences of unemployment. In the five years prior to the first interview, these per-

sons had been unemployed an average of 16.1 months, as compared to 19.1 months for those unemployed at tO.

The sample thus consists of a population with individuals at different points on a continuum including employment, unemployment, in training and completely outside the labour force (Halvorsen 1995). This sample, it was

believed, reflected different aspects of unem-

ployment problems, experienced by those both with and without unemployment benefits, since many of those ineligible for unemployment benefits were provided with opportunities to enrol in employment programs.

The first interviews were conducted in March and April of 1991 (tl), i.e. about two months after the sample was drawn. The

response rate was 71 per cent. Attrition was somewhat greater for the long-term unem-

ployed (37 per cent) than for those enrolled in

employment programs (20 per cent). A second interview took place in September and October of 1992 (t2), i.e. about 18 months after the first interview. The response rate at the second interview was 79 per cent, but some of the

respondents refused to match answers from the first interview with the second one, result-

ing in a response rate of about 50 per cent of the original sample. The final sample had

exactly the same proportion of unemployed (i.e. two-thirds of the total) as the original sample drawn at tO, but men and people from the metropolitan area around Oslo were somewhat under represented1.

The main reason for the attrition from the initial sample and that of later interviews

(tl and t2) was refusal to take part. There were also problems getting in touch with the

persons selected for interviews. This was

mainly the case for men. Refusals to take part because of sickness were almost non-existent. We examined especially the attrition from tl to t2 in terms of important characteristics

given at the first interview (see note 1). There did not seem to be great differences in terms of number of months unemployed during the last five years, financial problems, psychological distress, employment commitment and em-

ployment deprivation.

Research design Our research design can be seen as an exten-

sion of the one-group post-test only design, but with repeated outcome measures (Wine- field & Fryer 1996) and where re-employed

people are used as a control group. A major




weakness is the lack of pre-test measures (pre- unemployment psychological distress) and the lack of a securely employed control group. We have tried to overcome these weaknesses by using the securely re-employed at t2 as a control group and by controlling for psychological distress at tl. It must be noted, however, that it is also problematic to use securely employed people as a control group, since their psychological well-being may be affected by unsatis-

factory and stressful jobs, or by fear of job loss (Winefield & Fryer 1996).

4. Dependent variables

Measures of psychological distress We used two measures of psychological distress in our analyses of the data. One was an index of psychological distress at t2, which constituted the central dependent variable. The index of psychological distress (ten-item scale) was based on questions posed at the fol-

low-up interview. The respondents were asked to rate their symptom severity for each item on a four-point scale as follows: 1 = 'not at

all', 2 = 'to a certain extent', 3 = 'to a great extent' and 4 = 'to a very great extent'. The

question posed was whether, during the last

fortnight, the respondent had had any of the

following problems: feeling fearful, faintness or

dizziness, nervousness or shakiness inside, cry- ing easily, blaming themselves for things, sud- den fear without reason, difficulty falling asleep or staying asleep, feelings of hopeless- ness regarding the future, feeling blue, worry- ing and uneasiness. The minimum possible score was 10 and the maximum 40, which was divided by 10. Cronbach's alpha was 0.92, which indicates high internal consis-

tency. These questions were taken from Hop- kins Symptom Checklist (HSCL). Four of the

questions were related to anxiety and the

remaining six to depression (Mourn et al.

1991). Although somatic anxiety, psychic anxiety and depressed symptoms can be con- sidered three different dimensions (Huppert et al. 1989), it has been shown that there is

strong positive correlation between them, especially between anxiety and depression (Warr 1987; Mourn et al. 1991). Both dimensions are therefore included in our measures of psychological distress.

The other measure, a three-item index2 related to distress during the six-month periods before tl and t2, was used to operationalize

health selection/state dependency. This variable was also used to measure changes in psychological distress. Previous research using a distress measure similar to the one used here indicates both its sensitivity and a strong correlation with unemployment and perceived economic problems (Mastekaasa 1993). Both these variables are based on self-assessed health. The main argument for using self- assessed health is that health problems 'need to be subjectively perceived as such by the individual in order to impact negatively on his or her personal quality of life' (Mourn 1992:935). It also appears that there is a high level of comparability between subjective and more objective indices of mental health

(Mourn 1992; Brenner et al. 1989).

5. Independent variables

Employment status

Although the respondents were unemployed or on labour-market programs at tO, their unem-

ployment status could have changed over time. Therefore, we collapsed employment status at t2 into three categories: employed, unemployed and outside the labour force.

As an indicator of satisfaction with work-

ing conditions in the present job, we used a

battery of questions about actual working conditions in comparison to those of jobs held

prior to the last spell of unemployment. We assumed that satisfaction with the present job was associated with experienced changes in

job content. We constructed a ten-item index of changes in working conditions, including the following: wages, travel distance, physical work environment, match of job with qualifi- cations, work time, stressful work, work time

arrangements, occupational level, autonomy in the job and 'other'.

The re-employed respondents were asked whether these present ten work conditions were better (score 3), unchanged (score 2) or worse (score 1) than those in previous jobs. The reliability of this index was acceptable (Cronbach's alpha 0.70). We collapsed the overall scores into three values. Those who scored 20-30 were regarded as having better

working conditions; those who scored 16-19 were regarded as unchanged, while those who scored lower (10-15) were regarded as having worse working conditions than in previous jobs.

Job security was based on a question about fear of job loss. The re-employed at t2




were asked whether they felt at risk of losing their present jobs. We constructed a dummy variable by differentiating between those

responding 'yes, definitely' and 'yes, probably' and between those who did not know and those responding 'no, not very likely' or 'no,

definitely not'. We could not be sure that these

responses were accurate reflections of their job security, but it turned out that two-thirds of those in temporary jobs regarded these as in-

secure, as compared with less than one-fifth of those in permanent jobs and one-third among the self-employed. There was thus a high correlation between perceived job security and the nature of the contract of employment (see also Burchell 1994). The re-employed were accord-

ingly divided into two categories: securely and

insecurely re-employed. Control variables included financial hard-

ship, earlier psychological distress, changes in marital status, unemployment of spouse in addition to sex, age and education level. The number of months in the present job was controlled for in the models analysing psychological distress among the re-employed. Unemployment of spouse/partner was entered as a dummy variable, where those who had a

partner who had been unemployed for three months or more between tl and t2 were

assigned code 1. Others were assigned code 0. In order to reduce unobserved heterogeneity, we controlled for length of unemployment in 1990. In Table 4, we controlled for the possible impact of having had a managerial position before first-time unemployment.

Other studies have demonstrated that selection into unemployment is health-related

(Hammer 1992; Mastekaasa 1996). We therefore controlled for the extent of psychological distress at ti. A problem with control of health selection is unobserved heterogeneity among the unemployed, such that individual differences unspecified in the models could affect the estimates. The observed state dependence could be spurious, since past and present psychological distress are correlated due to possible unknown characteristics of the individuals

(Heckham & Borjas 1980). Change in marital status was controlled

for, since marriage/cohabitation was regarded as a moderator, while family break-up was seen as a stressful life event that could result in psychological distress. In general, older persons have higher levels of psychological distress than younger (Winefield 1995). In

particular, the loss of a work role for an older

person has a much greater impact on psychological state than for a younger person, who can enter more easily into other socially acceptable roles by being a student or a mother, for

example. Education level can be regarded as an indicator of socio-economic status, but the evidence is inconclusive. Some have found that higher status was associated with better

coping, while others have found the opposite (Winefield 1995).

Other factors, such as employment com-

mitment, social support (living alone or not and having close friends or not) were consid- ered important to control for (Winefield 1995;

Fryer 1995). The local level of unemployment could also be understood as having an impact, since it has been suggested that it is psychologically easier to be unemployed in areas characterized by high rather than low unem-

ployment (Clark & Oswald 1994). As a measure of the possible impact of the aftermath of previous unemployment spells, we use two variables, 'year first unemployed' and

'length of unemployment in the last five

years'. Bivariate analysis indicates, however, that these variables do not seem to be significant (results not shown). Therefore they were excluded from the final models.

6. Results

Descriptive statistics A comparison of psychological distress among the securely and insecurely re-employed, the

unemployed and those outside the labour force

gives the expected picture (Table 1). Overall, the level of psychological distress among recur-

rently unemployed is slightly higher than for the re-employed and those outside the labour force. For only a small minority could this distress be understood as mental illness. Accord-

ing to Mourn et al. (1991), a person can be defined as a 'possible case' in need of treatment for depression if she/he scores an average of 1.75 on the HSCL's ten questions about

depression. In our sample, only 14 per cent had an average score above this cut-off point. Of these, only 17 per cent (12 persons) responded that sickness or disability restricted their capacity to work to a great or certain extent (results not shown). On average, how-

ever, the recurrently unemployed showed significantly higher distress scores than both the

securely re-employed and those outside the labour force, but did not show significantly




higher distress scores than the insecurely re-

employed (result not presented). As for changes in psychological distress

from tl to t2, we were required to use the three-item scale, since the ten-item scale was

only available at t2. The initial mean scores at tl were almost identical to those at t2 for the three categories: re-employed (in secure or insecure jobs), outside the labour force and

unemployed. At t2 there are significant (p <

0.01) differences in distress scores between these categories. The highest average distress scores were found among the unemployed (4.31, up from 4.06) and insecure employed (4.13, up from 3.92), while those outside the labour force at t2 had a reduction in distress scores (3.95, down from 4.00). The same is true for those in secure jobs at t2 (3.81 down

from 3.98; see Table 2 for descriptive statis-

tics). These differences between the unem-

ployed and employed were also found in the Level of Living Survey of the ordinary population (Statistics Norway 1991) and in the Health Survey (Statistics Norway 1995).

Multivariate analysis In order to explain the apparently complex patterns of interaction between psychological distress and employment status, multivariate

analyses of the interindividual variations in distress or interindividual variations in intraindi- vidual changes in distress were used (Lynd- Stevenson 1991). Because of problems of low measurement reliability associated with using changes in distress as the dependent variable

(Allen & Yen 1979), we chose instead to ana-

Table 1. Psychological distress (ten-item scale) by employment status at tl (percentages, means and standard deviations).

Scores 1.0-1.54 1.55-1.74 1.75> Mean (SD)

Securely re-employed Insecurely re-employed Recurrently unemployed Outside labour force All

90 77 73 82 79

393

3 9 8 6 7

35

7 14 19 12 14 70

1.24(0.45) 1.36(0.52) 1.43 (0.58) 1.28 (0.46) 1.34 (0.53) 498

?2: ? < 0.05. ANOVA: F = 4.20; df = 3; p < 0.01.

Table 2. Social characteristics of the long-term unemployed according to their labour-market status at tl.

Outside Securely Insecurely Recurrently labour- re-employed re-employed unemployed market (n=116) (n=79) (n = 220) (n = 79)

Sex (female %) 52 56 49 61 Age (mean) 34 34 34 30 Education (mean years) 10.6 10.5 10.6 10.3 Family break-up tl-t2 (%) 1.6 2.5 5.1 3.8 Severe economic problems t2 (%)* 7.1 7.6 24.0 13.9 Unemployed spouse (%) 10.3 15.2 12.4 15.2 Weeks unemployed in 1990 (mean)* 27 27 33 26 Number of jobs tl-t2 (mean) 1.4 1.4 0.8 0.9 Year first unemployed (mean) 1987 1988 1987 1987 Psychological distress tl (mean three-item scores)* 3.98 3.92 4.05 4.00 Psychological distress t2 (mean three-item scores)* 3.80 4.13 4.31 3.84 Employment commitment (mean scores)* 4.54 4.37 4.28 4.25 Social assistance recipients 1990 (%) 21 19 30 37 Unemployment benefit recipients 1991 (%)* 76 77 74 57 Main/single provider (%) 53 42 40 41 On labour-market program tO (%)* 35 43 26 41

* Differences significant at the 0.05 level.




lyse interindividual variations in distress at t2

using the ten-item scale. We initially analysed variations in psycho-

logical distress for the whole sample (Table 3) and then for the re-employed only in order to

gain an understanding of the impact of

changes in work conditions and job security on variations in psychological distress (Table 4). Model 1 represents an analysis of variations in distress by employment status at t2, while model 2 controls for possible impact from all other factors. Model 3 controls for state dependency by introducing psychological distress at tl.

Model 1 indicates that employment status

explains little of the variation in psychological distress, with unemployment alone compared with secure re-employment significant at the 0.05 level. The significance of this coefficient

disappears when financial hardship and other variables are controlled for (model 2), which indicates that the initial differences are largely related to selection. Economic problems classi- fied as 'severe' at t2 and change in marital status (marital dissolution) between tl and t2 seem to be the most influential variables in

explaining variations in psychological distress. Further, sex (i.e. being a woman), age and

Table 3. Determinants of psychological distress (ten-item scale). Ordinary least squares estimates at time 2 (n = 501) (missing values are substituted by means).

Model 1

Beta (t-value)

Model 2 Model 3

Adj. R2 Constant Employment status X.2

Outside labour-market Insecure job Unemployed Secure job (reference category) Sex (1 = females, 0 = males)

Age 50-59 40-49 30-39 20-29 (reference category)

Level of education (years) <9 years 10-12 years 13 > years (reference category)

Change in marital status1 1-0 0-0 0-1 1-1 (reference category)

Economic problems Can't make ends meet Have to use savings Can just manage Can save a little Can save substantially (reference category)

Number of weeks unemployed in 1990 Unemployed spouse (1 = yes, 0 = no)2 Psychological distress at tl (scores)

0.02 (26.7)

0.03 (0.6) n.s. 0.08 (1.6) n.s. 0.18 (3.3)***

0.17 (8.6)

0.00 (0.0) n.s. 0.07 (1.5) n.s. 0.08 (1.5) n.s.

0.11 (2.6)**

0.10 (2.2)* 0.07 (1.4) n.s. 0.03 (0.6) n.s.

0.07 (1.4) n.s. 0.11 (2.3)*

0.14 (3.2)*** 0.13 (2.7)**

-0.02 (-04) n.s.

0.33 (3.9)*** 0.03 (0.4) n.s. 0.02 (0.2) n.s.

-0.04 (-0.4) n.s.

-0.04 (-0.9) n.s. 0.08 (2.0)*

0.32 (4.6)

0.00 (0.1) n.s. 0.08 (1.9) n.s. 0.11 (2.2)*

0.10 (2.6)**

0.09 (2.2)* 0.04 (1.0) n.s. 0.00 (0.1) n.s.

0.05 (1.2) n.s. 0.11 (2.4)*

0.13 (3.3)*** 0.07 (1.6) n.s.

-0.03 (-1.0) n.s.

0.20 (2.5)** -0.01 (-0.2) n.s. -0.06 (-0.6) n.s. -0.07 (-0.8) n.s.

-0.08 (-2.2)* 0.05 (1.2) n.s. 0.41 (10.4)***

* Significant at the 0.05 level.

** Significant at the 0.01 level.

*** Significant at the 0.001 level,

n.s. = not significant. 1 1 = married/cohabiting; 0 = other. 2 For three months or more between tl and t2.




education level seem to be of some significance. The same is the case for employment status of spouses. In model 3, we controlled for

psychological distress at tl, resulting in some

(minor) changes in the other coefficients. We observed a significant difference between the still unemployed and the securely re-employed. Surprisingly, the number of weeks unemployed in 1990 also seems to be of significance, but here one finds a coefficient sign the opposite of what could be expected.

Table 4 shows the results of the regression analysis for the re-employed. In model 4, only present employment status variables are

entered, while in model 5 other variables are controlled for. Finally, model 6 controls for psychological distress at tl. Being in an insecure

job is positively associated with psychological distress. Additionally, it seems that for the re-

employed, levels of education, financial hard-

ship and marital dissolution could explain most of the variation in psychological distress. With respect to unsatisfactory working conditions (as compared with previous jobs), the coefficients are in the expected direction, but not significant at the 0.05 level. This is also the case for 'months in present job' and

'employment status of spouse', while 'position

Table 4. Determinants of psychological distress (ten-item scale) among re-employed at time 2. Ordinary Least Squares estimates (n = 204) (missing values are substituted by means).

Model 4

Beta (t-value)

Model 5 Model 6

Adj. R2 Constant Change in work conditions

Worse Unchanged Better (reference category)

Job security (1 = no, 0 = yes) Sex (1 = females, 0 = males) Age Level of education

<9 years 10-12 years 13 > years (reference category)

Economic problems Can't make ends meet Have to use savings Can just manage Can save a little Can save substantially (reference category)

Position held before first time unemployed (1 = managerial, 0 = other)

Months in present job Change in marital status1

1-0 CM) 0-1 1-1 (reference category)

Unemployed spouse (1 = yes. 0 = no)2 Psychological distress (tl scores)

0.02 (19?)

0.13 (1.8) n.s. 0.08 (1.0) n.s.

0.12 (1.7) n.s.

0.24 (4.6)

0.06 (0.9) n.s. 0.07 (1.0) n.s.

0.12 (1.8) n.s. 0.08 (1.0) n.s. 0.13 (1.9) n.s.

0.12 (1.7) n.s. 0.20 (2.8)**

0.31 (3.2)** 0.02 (0.2) n.s.

-0.07 (-0.5) n.s. -0.07 (-0.5) n.s.

0.01 (0.2) n.s.

-0.00 (-0.1) n.s.

0.27(4.3)*** 0.23 (3.3)** 0.06 (0.9) n.s.

0.12 (1.9) n.s.

0.35 (2.5)

0.07 (1.1) n.s. 0.11 (1.6) n.s.

0.13 (2.2)* 0.09 (1.4) n.s. 0.08 (1.2) n.s.

0.13 (1.8) n.s. 0.19 (2.8)**

0.20 (2.1)* 0.00 (0.1) n.s.

-0.11 (-0.7) n.s. -0.09 (-0.6) n.s.

-0.00 (-0.01) n.s.

0.02 (0.3) n.s.

0.25 (4.2)*** 0.15 (2.2)* 0.01 (0.2) n.s.

0.09 (1.6) n.s. 0.35 (5.6)***

* Significant at the 0.05 level.

** Significant at the 0.01 level.

*** Significant at the 0.01 level,

n.s. = not significant. 1 1 = married/cohabiting; 0 = other. 2 For three months or more between tl and t2.




held before first time unemployed' was of no

significance at all.

7. Discussion

The bivariate findings shown in Table 1 and model 1 in Table 3 seem to support Marie

Jahoda's (1981) contention that any job is better than unemployment, and thus by exten- sion the social causation hypothesis. It has been demonstrated, however, that differences in psychological distress between the recur-

rently unemployed and those insecurely re-

employed are not significant. When other factors are controlled for (i.e. in model 3, Table

3), her contention does not seem to hold even for the securely re-employed. Yet, when con-

trolling for psychological distress at tl (model 4, Table 3), there is a significant difference between secure re-employment and the other

states, although it is only significant as com-

pared with the unemployed. The evidence for a causal effect of (secure) re-employment status on psychological distress is based on the

assumption that the three-item index of distress at tl is able to differentiate sufficiently between levels of distress, thus generating unbiased estimates of the employment status variables.3 This raises the question: what can

explain the insignificant impact of insecure re-

employment and the minimal impact of secure

re-employment on psychological distress at t2?

Here, two explanations present themselves.

Psychological distress among the re-

employed could be understood as the aftermath of previous unemployment, a suggestion made earlier by Fineman (1983, 1987). To a certain extent, we have controlled for this by entering number of weeks unemployed in

1990 into models 2 and 3 (Table 3), but the coefficient has the opposite sign of what would be expected, so this explanation is not very likely. We have also examined differences in distress related to previous unemployment duration among those re-employed only, by controlling for number of months unemployed in the five years prior to tl. It turned out that those with the shortest unemployment duration (0-6 months and 7-12 months) were significantly more distressed than the reference

category (unemployed 32 months or more), which is also the opposite of what would be

expected (results not presented). We are left with the explanation put for-

ward in the introduction: namely, that return-

ing to paid work can be distressing after a

longer period of unemployment. We could

expect then that those who have been re-

employed for the shortest time would be more

likely to experience distress than those who have been re-employed longer at t2. But, as demonstrated in Table 4, this is not the case. In fact, those re-employed for 0-6 months are less likely to experience distress than the reference category comprised of those re-employed 19 months or more, when other factors are controlled for (results not shown). Thus, there is no clear evidence from our data that these two explanations, namely that psychological distress among the re-employed is the aftermath of previous unemployment or that

greater distress follows a longer period of

unemployment, are valid. It may be that long-term unemployed

people reach a plateau of illness, after which an adaptation process takes place, resulting in a decline in psychological distress. Previous research indicates that a plateau of poor mental health is reached after unemployment periods of three to six months, seemingly because the unemployed then appear to experience environmental clarity. In other words, they become accustomed to the situation and then take up additional activities (Warr 1987:232). In order to examine this possibility, we differ- entiated in model 2 (Table 3) between unem-

ployment periods of differing duration during 1990-92 (0-6 months, 7-12 months, 13-18, 18-24 and 25-33 months). These are entered as dummy variables, with 25-33 months as a

reference category. This then reveals that those who had been unemployed for the shortest

period are less likely to experience distress than those who had been unemployed the

longest. The coefficient here, however, is not

significant at the 0.05 level (results not

shown). This is supported by other findings (Leana & Feldman 1990; see, however, Dew et al. 1992; Winefield 1995; Hovland et al.

1996). In Table 4, where we look at the re-

employed alone, we differentiate (as in Table

2) between the securely and insecurely re-

employed. We see that employment status (insecure as compared with secure jobs) seems to

have an impact on psychological distress. Neither is the difference in mean distress scores (ten-item index) or the distribution of

distress (as presented in Table 1) for the in-

securely re-employed and unemployed significant at the 0.05 level (results not presented).




It thus appears that insecure re-employment does not represent a passage of reintegration (in Ezzy's vocabulary) or a benefit of the latent functions of work (as Jahoda would have put it). Instead, this finding supports earlier research that uncertainty about the future and fear of job loss could be as distressing as unem-

ployment. We can rule out a possible explanation that distress at the outset also may lead to fears of job loss (Mastekaasa 1996), since, as mentioned earlier, on average those in insecure jobs had lower distress levels at tl than those in secure jobs. However, it is quite con- ceivable that those with high psychological distress were persons who had to accept less attractive jobs. If this is the case, it may explain why those (men) with insecure jobs had higher distress levels at tl than those in secure jobs. It turns out that men in insecure

jobs at t2 had, on average, higher levels of psychological distress at tl (three-item scale) than men in secure jobs, while the opposite was the case for women, though differences were not

significant at the 0.05 level (results not

shown). Women may experience job in-

security differently from men, because their labour-market careers may often be secon-

dary to their domestic commitments (Hakim 1991).

On the other hand, we are unable to con- firm or refute earlier findings (Winefield et al.

1991) that those dissatisfied with their present jobs had higher psychological distress than the

unemployed (results not shown). This could be related to the fact that we did not ask directly about dissatisfaction with present jobs, but asked instead whether various aspects of the

job were better, unchanged or worse in com-

parison with previous jobs. Our findings indicate the existence of

health selection factors. It must be noted, however, that our research design does not include 'before' and 'after' dimensions. The respondents were already unemployed before the research began. Thus, health selection could

quite simply be state dependency. This is, however, unlikely. Hammer (1997), who utilized a before/after design, found strong health selection influencing unemployment among Norwegian youth. This has been found in other studies as well (Spruit 1989; Verklej 1989; Schaufeli & van Yperen 1992; Claussen 1994; Mastekaasa 1996). Comparing the estimates of model 2 with model 3, which includes the measure of psychological distress at the first interview, we find small differences

between the full model (model 3) and model 2. Inclusion of psychological distress at tl means that we controlled for distress-based selection into unemployment. In both models, the

unemployed and the insecurely re-employed are more likely to be distressed than the

securely re-employed. The coefficients are significant or on the border of significance at the 0.05 level. It thus seems likely that to a certain extent, unemployment causes psychological distress, while re-employment reduces stress levels - provided that the job is secure. But, as demonstrated in Table 3, model 1, employment status at t2 explains little of the variation in psychological distress.

As we can see in model 3, the substantive

importance of being in a secure job rather than being unemployed is further reduced when other factors are controlled for.4 Inse- cure re-employment has no positive impact on

psychological distress, which supports earlier

findings. However, this finding does not support the preliminary conclusion put forward

by Kessler et al. (1989) that recently re-

employed people are happy to have any job. As shown by our findings, re-employed persons in insecure jobs are significantly more depressed (and possibly in need of treatment; see note 4) than re-employed persons who perceive their

jobs to be secure. It must also be noted that those outside the labour force (consisting mostly of students and homemakers) seem to have about the same distress levels as the

securely re-employed. This supports Ezzy's the-

ory that becoming a student (or homemaker for that matter) could also be a re-integrative passage.

As suggested in the introduction, there

may also be a health selection out of unem-

ployment. As noted, however, distress levels at tl (three-item scale) are, on average, identical for the re-employed, the unemployed and those outside the labour-market. In addition, the association between psychological distress scores at tl and employment status at t2 is insignificant for both men and women, which is an indication that there is no selection into

re-employment of less distressed persons. Yet, re-employed men who report worsened job conditions seem to have higher distress levels at the outset (tl) than other re-employed men (results not shown). Therefore, we cannot exclude the possibility that differential selection out of unemployment can explain, in

part, some of the variations in psychological distress at t2 reported in Table 4.




Unobserved heterogeneity, i.e. the possibility that the psychologically distressed possess some (unobserved) characteristics differing from other categories, could lead to selection bias and overestimates of both unemployment and re-employment effects. It is problematic to model such heterogeneity because of the small

sample size and the fact that we must control for selection into several different states, which would lead to high multi-colinearity and unstable estimates.

A predictor of psychological distress more

important than employment status is economic deprivation. Many earlier studies have not distinguished between the psychological effects of unemployment and those of financial

hardship usually related to joblessness. When

controlling for economic problems, the coefficient of employment status drops considerably. This is still significant, according to a recent

Norwegian study, which, however, did not dis-

tinguish between secure and insecure employment (Mastekaasa 1993). Re-employed persons could quite likely experience financial

hardship because of low-paying new jobs and/ or the after-effects of previous unemployment. The majority of the long-term unemployed in

Norway have been found at the lower end of the income distribution even when in work

(Halvorsen 1997b; Lyngstad & Roalso 1997). Psychological distress thus could be the result of a vicious circle of marginalized labour-market positions and economic marginalization. Within this destructive cycle, there seems to be a selection of people highly vulnerable in terms of psychological distress. This indicates that the consequences of unemployment have to be examined in light of previous work careers and life-courses (Whiteside 1992). Some of the long-term unemployed have quite likely experienced a gradual decrease of their economic resources, which in itself is psychologically distressing (Whelan 1992).

As expected, changes in marital status have an impact. Social support is a well- known moderator of psychological distress, while separation/divorce in most cases is a stressful life-event. Being unmarried through divorce (or widowhood) is psychologically dis-

tressing (Mastekaasa 1993). Conversely, mar-

riage can be a source of social support moderating distress brought about by negative life-events/occurrences, such as unemployment. Our variables could not distinguish between the effects of transition from one marital status to another or the effects of a parti-

cular marital status which could give rise to various types of causation effects (Mastekaasa 1993). In his study of the unemployed based on a 1991 quality of life survey in Norway, Mastekaasa did not find evidence of a buffering effect of marriage. Thus, it is highly likely that what matters is an increase in distress caused

by marital dissolution. Also as expected, the age coefficient was

significant, but only when entered as a

dummy variable (50-59 years as compared with the reference category 20-29 years). As for education level, it turns out that those with 10-12 years education are significantly more distressed than those in the reference

category (13> years education), while this is not the case for those with nine years of education or less. It could be that those with the most education are better able to cope emo-

tionally with their situation, and thus are less distressed than those with lower levels of education.

The question must be asked whether the attrition of the initial sample of 29 per cent has an impact on our conclusions. This seems

very unlikely, since, as mentioned earlier, the main reason given for dropping out was refusal to take part in the study. Would those most

negatively affected by unemployment be more

likely to refuse to take part than others? It

might be expected that these persons would be more interested in the study than those less

negatively affected. Attrition, of course, could influence variations in psychological distress

presented earlier in the sense that these figures would not be representative for all long-term unemployed. But attrition is unlikely to influence the conclusions about factors explaining these variations. The attrition from tl to t2

(addressed in note 1) is unlikely to have any impact on our conclusions. We checked for the influence of missing observations by reanalys- ing the models so respondents with missing observations on any of the variables were excluded. The samples were then reduced to 476 (Table 3) and 195 respondents for tl and

t2, respectively (Table 4). The estimates are of the same magnitude as those presented in these tables.

There are also potential problems invol-

ving the effects of repeated testing. If people are asked the same questions several times,

they may feel compelled either to change or be consistent with their previous answers (Wine- field 1995). However, we did not use identical

questions about psychological distress in the




multivariate analyses. In addition, the time

period between first and second interviews was about 18 months, so it is not very likely that the respondents at t2 remembered what they answered at tl.

Both our measures of psychological distress are based on personal interviews, which means that there is a risk of under-reporting symptoms of distress as compared with self- administered questions. As has been demonstrated by Mourn (1995), such under-reporting may create problems if, for example, different categories vary in the degree of

under-reporting psychological distress. He

found, for example, that young and well-edu- cated respondents appear particularly prone to

under-report symptoms when interviewed. This may explain some of the age differences

(50-59 years as compared with 20-29 years) (Table 3) as well as those of education level

(Tables 3 and 4) that we found in the model estimations presented.

8. Conclusion

This study suggests that psychological distress, to a certain extent, is unrelated to the unem-

ployment situation itself, but arises from problems in other areas in life (Kessler et al.

1987). It is more likely, however, this could be due to the selection into long-term unemployment of persons already experiencing psychological distress and/or cumulative problems related to poor economy and a marginal position in the labour-market. Long-term unem-

ployed people seem to be overrepresented among 'the working poor'. Unemployment leads to economic problems, which, in turn,

represent a risk of higher psychological distress and therefore greater difficulties in getting work. Negative life circumstances unrelated to

unemployment, such as family break-up, could also impact on psychological well-being, aside from financial hardship. As previously dis- cussed, earlier research has tended to overestimate emotional damage created by job loss per se, where financial hardship was not controlled for. This means that mental health has to be seen in relation to wider economic and

employment opportunities. Our findings do not

directly challenge the theory that unemployment can lead to lasting personality change. Rather, our results strongly indicate that longitudinal studies of the unemployed are needed

to establish clearer relationships between joblessness and psychological distress.

Similarly, our findings indicate that it is of considerable importance to differentiate between secure and insecure work and jobs representing worsened or better working conditions as

compared with previous jobs held. We have seen that insecure work can be as harmful as

being unemployed long-term, especially in times of high unemployment and a gloomy economic outlook. These findings support the

agency theory: an insecure job and financial

hardship makes it difficult to make predictions about the future, representing an interruption of the actor's plans and strategies. Then follow the negative psychological consequences of

unemployment (Fryer 1986; Burchell 1994). It could be that perceived job insecurity and threat of job loss might be equated with threat of poverty (Burchell 1994). Further, Ezzy's theory regarding re-employment as a re-

integrative passage only applies to secure

re-employment. These findings also demon- strate the weakness of Jahoda's theoretical

approach, which, apart from neglecting income loss, regards any job as better than unemployment. On the other hand, we find support for Warr's vitamin model, and especially for two of his nine determinants of mental health, namely 'availability of money' and 'environmental

clarity'. We must examine the consequences of

unemployment in the context of individual

working careers and life courses in order to isolate the causal and/or indirect effects of

unemployment on psychological distress. Our

findings provide only some limited support to the social causation hypothesis. Instead, our research indicates that the main impact of

unemployment on psychological distress seems to be indirect, namely via financial hardship. In order to control for health selection effects, a preferable design for future and much needed research in this area would be one where individuals could be sampled before

becoming unemployed and where stable

employed people could be a control group.

First version received February 1997 Final version accepted February 1998

Acknowledgements The data reported in this paper were obtained through Statistics Norway and placed at our disposal by Norsk Samfunnsvitens- kapelig Datatjeneste (NSD). The study was financed by a Norwegian Research Council research grant under its pro-




gramme 'Velferd og samfunn' and the Ministry of Adminis- trative Affairs. This paper was written during the author's study leave from Oslo College while being a visiting scholar at the Social Policy Research Centre, the University of New South Wales. Sydney. I thank Anne Hammarstr?m, University of Ume?, Sten-?ke Stenberg. SOFI, Stockholm, Arne Mastekaasa, University of Oslo and two anonymous reviewers for useful comments on an earlier version of this article.

Notes 1 Characteristics of the sample:

Initial sample Sample (tO) (tl)

Sample (t2)

Sex Males Females

Age (years) 20-24 25-29 30-44 45-59

Region Oslo, Akershus Ostlandet outside Oslo/

Akershus Sorlandet Vestlandet Trendelag Nord-Norge

Category Labour-market

program Unemployed

Number of months unemployed in the five years before tl

Financial problems at tl Yes No

Psychological distress (mean score) tl

Employment commitment (mean score) tl

Employment deprivation (mean score) tl

55 45

29 20 34 17

21 26

12 16 10 15

30

70

4.06

4.37

51 49

31 20 32 17

17 28

11 18 10 16

33

67 18.4

44 56 4.01

48 52

27 19 35 19

15 31

12 16 11 15

33

67 18.2

41 59

998

4.35

-0.55 -0.50

708 501

2 This index is based on three questions asked at both the initial interview (tl) and the follow-up interview (t2):

Have you, during the last six months, often, occasionally or never been troubled by:

a) strong heart pounding without any prior effort (palpita- tions)?

b) nervousness, anxiety or restlessness? c) feeling depressed and blue so that you felt that everything

is an effort? The respondents were measured on an ordinal scale. Those

who answered 'often' were assigned the value 3, those who answered 'sometimes' 2, and those who answered 'never' 1. The maximum possible cumulative score was thus 9, and the

minimum 3. The validity and reliability (Cronbach's alpha 0.73) both seem high (see Halvorsen 1997b for further discussion). The correlation between this three-item scale (follow-up interview) and the ten-item scale was 0.66 (Pearson's r). 3 The validity of the index of symptoms of nervous conditions seems to be reasonably high. It turns out that high scores on the index of psychological distress were positively associated with frequent use of tranquilizers pre- scribed by a doctor.

4 We regard a distress score above 1.75 as a possible case in need of treatment, and have dichotomized the dependent variable accordingly. Using logistic regression with employment status as the independent variable and those with secure jobs as the reference category, it turns out that the risk of exceeding that distress level was, for the unemployed, 2.6 times (p < 0.001) that of the securely employed, while the risk for those in insecure jobs was 2.1 times (p < 0.05) that of the securely employed, when controlling for psychological distress at tl (results not presented). This indicates that differences in psychological distress between the securely employed and the unemployed/insecurely employed are of substantive importance.

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Impact of Re-Employment on Psychological Distress among Long-Term Unemployed