Friday, May 08, 2009

High Cost of Job Loss

Last week, we talked about both the long run effects of getting fired (lower wages) and how raising the cost of job loss can reduce shirking. A new study demonstrates that job loss (particularly layoffs, but also getting fired) has additional costs -- health shocks:
a new study has found that losing your job can make you sick. Even when people find a new job quickly, there is an increased risk of developing a new health problem, such as hypertension, heart disease, heart attack, stroke or diabetes as a result of the job loss.


Workers who are in poor health have a 40 percent increase in the odds of being laid off or fired, but Strully's findings go beyond sicker people being more likely to lose their jobs. She finds that "job churning," defined as high rates of job loss but low unemployment, has negative health consequences for workers who were not already sick. For those who lost their job—white or blue collar—through no fault of their own, such as an establishment closure, the odds of reporting fair or poor health increased by 54 percent, and among respondents with no pre-existing health conditions, it increased the odds of a new health condition by 83 percent. Even when workers became re-employed, those workers had an increased risk of new stress-related health conditions.

Unlike the results of job loss due to an establishment closure, when health effects were analyzed based on workers who were fired or laid off, significant differences were found based on the workers' occupations. While being fired or laid off or leaving a job voluntarily more than doubles the odds of a fair or poor health report among blue-collar workers, such job displacements have no significant association with the health reports of white-collar workers. The reasons for this disparity are unclear based on the study results.

I have heard of people becoming extremely stressed out and having lots of premature gray hair grow in after loosing a job, but stress leading to severe illness or possible death? I guess I have underestimated the severity of what stress can do to a person.
This is a very interesting article, but I think there is much more to the story than is reported here. First of ll, there is a large and unreported psychological aspect here. Asking a study subject simply to report on "how they feel" physically leaves a large an unaccountable amount of wiggle room for psychology to come into play. They may simply have some mild depression that leads to feeling sick instead of the job loss directly correlating to illness. However, I think the most interesting part of this study can come from analyzing the difference between the non-correlation of sickness to white collar workers losing their jobs as compared to their blue collar counterparts. Hwat maybe the deciding factor here in medical insurance. White collar workers are much more likely to have secure medical insurance when tehy lose their jobs versus blue collar workers likely would not. This would naturally lead to higher stress levels and therefore, a greater incidence of illness. Unsurprisingly the illnesses often reported such as hypertension and heart disease have a large stress component associated with their development.
Losing job is very stressful and might bring bad condition of health. But it is depend on the person, I think. If they have a strong speciality, they could find job quickly than others. In this case, isn't less stressful? How about personality? if the person who loses job has good, positive attitude to the life, he or she is not sick easily. Losing job is painful and very stressful. But have to bear it
Stress can be very hard to handle. But, my employer, who is still hiring, found that those who just lost his job and gain another tends to work harder if and only if they can maintain their positive outlook in live. So, I guess it depends on the person who loses his job.
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