Unemployment, underemployment, occupational stress and psychological well-being.

Abstract:

Research on unemployment, underemployment and organisational stress have become major social issues over the past 20 years and have attracted considerable research interest on the part of organisational psychologists both in Australia and overseas. Globalisation has led to restructuring and downsizing in many industrialised societies and a shift, for many workers, from the prospect of secure, long-term employment, to unemployment or inadequate or insecure employment. This paper reviews the research on these topics, discusses their theoretical implications and suggests future research directions.

Keywords:

UNEMPLOYMENT; OCCUPATIONAL STRESS; PSYCHOLOGICAL WELL-BEING.

1. Introduction

Unemployment, underemployment and organisational stress have become major social issues over the past 20 years and have attracted considerable research interest on the part of organisational psychologists both in Australia and overseas. Even countries where the unemployment rate remained low during the 1983 recession experienced increased rates during the early 1990s, although by the end of the nineties (1999) official rates in many countries had declined. Globalisation has led to restructuring and downsizing in many industrialised societies and a shift, for many workers, from the prospect of secure, long-term employment, to unemployment or inadequate or insecure employment. There is growing evidence that the negative consequences of this shift are not merely economic, but also psychological.

This paper is divided into six sections. The following three sections are concerned with research on the psychological effects of unemployment, much of it by Australian researchers. The fifth section describes research on organisational stress. The sixth section summarises present and future research trends, nationally and internationally, in these closely related areas.

2. Psychological Research on Unemployment

Economists generally view unemployment (or inadequate employment) as an economic not a psychological problem. The rejoinder to this view is that although the causes of unemployment may be economic, the psychological consequences go beyond the economic (i.e. financial disadvantage). But this rejoinder needs to be supported by empirical evidence.

Winefield (1995) presented a comprehensive view of the literature on the psychological costs of unemployment. The research literature has demonstrated that there are substantial costs, both to the individual and to the family, that cannot be attributed solely to economic deprivation. Psychological researchers have had to address two issues in arriving at these conclusions. The first has been to demonstrate that the psychological effects of unemployment cannot be attributed to economic/financial factors alone, and the second has been to establish the causal link underlying the observed correlation between employment status and psychological well-being.

Much of the published psychological research on unemployment has concentrated on the possible damage to mental health or psychological well-being caused by unemployment, with the `selection vs. exposure' issue a major preoccupation (e.g. Hammarstrom & Janlert 1997). That is, given the common observation that employed individuals are less depressed and show higher self-esteem than their unemployed counterparts, can we attribute the difference to employment status (`exposure'), or does a pre-existing difference in psychological well-being influence whether one will obtain and/or retain employment (`selection')? Sophisticated longitudinal studies have been carried out designed to tease out selection and exposure effects (e.g. Winefield et al. 1993). The evidence seems to suggest that when jobs are plentiful, unemployed individuals tend to be generally unemployable or else `workshy' (Tiffany, Cowan & Tiffany 1970), in support of the selection hypothesis, whereas when jobs are scarce there is clear evidence supporting the exposure hypothesis (Winefield 1995, 1997). Presumably the same considerations would apply to the effects of underemployment.

3. Some Recent Psychological Theories of Unemployment

This section reviews six current theories that have been proposed to explain the psychological effects of unemployment.

3.1 Learned Helplessness Theory

Seligman and his colleagues have proposed that exposure to aversive uncontrollable outcomes can lead to cognitive, motivational, and emotional deficits in people who possess an unhealthy attributional style. This attributional style is characterised by a tendency to attribute negative outcomes to internal, stable and global causes and to attribute positive outcomes to external, unstable and specific causes (Peterson, Maier & Seligman 1993; Seligman 1975). The theory predicts that individuals experiencing unemployment (an aversive, uncontrollable outcome), should be more likely to become helpless and experience loss of self-esteem and depression if they possess an unhealthy attributional style.

3.2 Life-Span Developmental Theory

Erikson (1959) proposes 8 stages each with associated conflicts that need resolution for healthy psychosocial development. 1) Infancy--trust vs. mistrust; 2) Early Childhood--autonomy vs. shame; 3) Play Age--initiative vs. guilt; 4) School Age--industry vs. inferiority; 5) Adolescence--identity vs. identity diffusion. Identity refers to: a) sexual identity; and b) occupational identity. Some researchers have reported evidence suggesting that youth unemployment retards healthy psychosocial development, as predicted by the theory because it prevents the acquisition of occupational identity (e.g. Gurney 1980).

3.3 Deprivation Theory

Based on Freud's view that work represents our strongest tie to reality, Jahoda (1981) has proposed a theory that distinguished between the manifest benefits of employment (e.g. earning a living) and its assumed latent benefits which serve to maintain links with reality. She identifies five latent benefits: time structure; social contact, external goals, status and identity, and enforced activity.

Jahoda also believes that even bad jobs are preferable to unemployment: `even unpleasant ties to reality are preferable to their absence ... Leisure activities ... are fine in themselves as a complement to employment, but they are not functional alternatives to work' (1981, p. 189). This belief has not been supported by the research evidence, with studies by O'Brien and Feather (1990), by Winefield et al. (1993) and by Prause and Dooley (2001) showing that inadequate employment can be just as psychologically damaging as unemployment.

Some Australian researchers have recently attempted to measure access to the five latent benefits of employment and have claimed some support for the theory in that for unemployed people, access is correlated with psychological well-being (Creed & Macintyre 2001; Creed, Muller & Machin 2001).

3.4 Agency Restriction Theory

Fryer (1986) has proposed what he calls an Agency Restriction Theory as an alternative to Deprivation Theory. He criticises Jahoda's Deprivation Theory, on the ground that the five supposed latent benefits of employment are all too often costs rather than benefits. He writes of: `Arbitrary time structure without regard for human needs; autocratic supervision; activity for unclear or devalued purposes; a resented identity; the vacuous nature of imposed activities' (Fryer 1986, p. 12-3).

The theory assumes that people are agents who strive to assert themselves, initiate and influence events and are intrinsically motivated. In short, agency theory assumes that people are fundamentally proactive and independent, whereas deprivation theory, by contrast, assumes them to be fundamentally reactive and dependent.

According to Agency Restriction Theory the negative consequences of unemployment arise because it inhibits the exercise of personal agency. The restrictions imposed by economic deprivation make it difficult or impossible for people to plan and organise personally satisfying life styles. Most people work for the manifest benefit of employment without regard to its so-called latent benefits. The regular income enables them to plan and organise personally satisfying leisure activities and to save for, and plan for a satisfying retirement. Fryer argues that the role of poverty has been underemphasised in much of the contemporary research on unemployment compared with the research carried out in the 1930s.

3.5 Relative Deprivation Theory

Relative deprivation theory (Crosby 1976; Walker & Mann 1987) has recently been applied by Feldman et al. (1997) to explain reactions to unemployment and underemployment. In relation to employment status, relative deprivation may be defined as a perceived discrepancy between an individual's actual status and the status which he/she expects and feels entitled to. It involves two cognitive components: a perception of violated expectations; and a judgment as to the legitimacy of the violation (Walker, personal communication), both of which can be operationalised and measured.

3.6 Income Inequality Theory

Wilkinson (1996) has argued from international epidemiological statistics that increased income inequality has negative health consequences for all members of society and he proposes that the underlying mechanism for this is the breakdown of social cohesion which characterises `healthy egalitarian societies'. In such societies, according to Wilkinson, there is `a strong community life'; and `people are more likely to be involved in social and voluntary activities outside the home' (p. 4).

4. Longitudinal Studies of Unemployment in School Leavers

Although older unemployed people undoubtedly experience greater psychological distress than those who are young (e.g. Broomhall & Winefield 1990), there are nonetheless three good reasons for studying youth unemployment. First, youth unemployment rates are generally much higher than those in older age groups. Second, there are theoretical reasons to fear that any psychological damage suffered might have lasting effects that are damaging both to the individual and to society (Erikson 1971).

The third reason has to do with methodological considerations. As was pointed out in section 2, only longitudinal research designs can test the competing selection vs. exposure hypotheses. However there are two potential problems with such designs: a) confounding job loss with its anticipation; and b) lack of baseline matching. For example, Kasl & Cobb (1979), in a study of a plant closure, interviewed workers both before and after the event. Those who had lost their jobs reported feeling no worse than before because the fear, or anticipation, of losing their jobs was just as distressing as the actual job loss.

Because of such confounding, some researchers have seen advantages in studying school leavers and several longitudinal studies have been reported in the literature (e.g. Feather & O'Brien 1986; Winefield et al. 1993). Although all of these studies have shown the expected differences between the unemployed and employed, the groups were not always well matched while at school, which makes the later differences hard to interpret.

The ten year longitudinal study conducted by Winefield, Tiggemann, Winefield, and Goldney (1993) arose from an experimental research program on learned helplessness in humans (Barber & Winefield 1986; Tiggemann & Winefield 1978, 1987; Winefield & Tiggemann 1978; Winefield, Barnett & Tiggemann 1985).

The pilot study surveyed school leavers toward the end of their schooling and again, six months later after they had left school (Tiggemann & Winefield 1980). The main finding from this study was that the adolescents studied showed very high levels of work commitment whether they were employed or unemployed. In other words, we found no evidence to support the `dole bludger' view of unemployment that was being propagated (and continues to be propagated) by some journalists and politicians.

The study was similar in conception to several other Australian studies (Feather & O'Brien 1986; Gurney 1980; Patton & Noller 1984), but unlike them, involved ten waves of data collection rather than only two or three (i.e. participants were surveyed annually from 1980 to 1989). Some of the conflicting results between these studies can be attributed to lack of baseline matching. For example, any ongoing differences between employed and unemployed groups are impossible to interpret if the groups also differed while they were still at school.

Baseline (at school) matching was achieved in some (but not all) of our waves of data collection, enabling us to conclude that leaving school and obtaining satisfactory employment, or embarking on tertiary study leads to a marked improvement in psychological well being, whereas leaving school and becoming unemployed or obtaining unsatisfactory employment has no effect on psychological well-being (Tiggemann & Winefield 1984; Winefield & Tiggemann 1985, 1990a, 1990b; Winefield, Tiggemann & Winefield 1991, 1992a, 1992b; Winefield, Tiggemann et al. 1991, 1993; Winefield, Winefield, et al. 1991). These findings, incidentally, agree with those obtained by Gurney (1980) in Melbourne, but not with those reported by Feather and O'Brien (1986) in Adelaide or with those reported by Patton and Noller (1984) in Brisbane. Like Gurney, we found that leaving school and obtaining a job was associated with increased psychological well-being, whereas leaving school and becoming unemployed was not associated with a change in psychological well-being, whereas the other studies both reported that becoming unemployed was associated with a deterioration in psychological well-being and becoming employed was associated with no change.

The study was originally designed as a test of Learned Helplessness theory. We found some support for that theory in that ongoing causal attributions were associated with psychological well being as predicted (Winefield, Tiggemann & Smith 1987), although we found little support for the theoretical assumption that attributional style remains stable over time (Tiggemann et al. 1991). Our results provided some support for both Life-Span Developmental theory and Agency Restriction theory but failed to support Deprivation theory (see earlier).

In 2001 we commenced a new longitudinal school leaver study which aims to build on and improve the earlier one described above. Specifically, the sample of participating schools in the earlier study was unrepresentative in that only metropolitan high schools were sampled. The new study is aiming for a representative sample of South Australian schools, including private colleges as well as state high schools, and rural as well as metropolitan schools.

The new study will build on the earlier study in a variety of ways. During the course of the earlier study we dropped some of the initial measures during later waves (because they had failed to discriminate between the target groups) and replaced them with better measures. In the new study we will be better informed as to which measures to include from the start. We also plan to include new questions on bullying, on gambling, and on volunteering activities.

Importantly, the new study will focus on underemployment as well as unemployment. In their study based on US national longitudinal survey data, Prause and Dooley (2001) defined three categories of underemployment: involuntary part-time; poverty wage, and intermittent unemployment (defined as `15 or more weeks of unemployment in past year but presently working in an otherwise adequate job'). They reported that the first two categories showed levels of depression that were comparable to those who were unemployed (and much higher than those who were adequately employed), however the third category showed much lower levels of depression which were similar to those who were adequately employed.

The new study is also designed to test two of the other theories outlined earlier which were not tested in our previous study: Relative Deprivation theory and Income Inequality theory.

5. Studies of Organisational Stress

Cooper (1998) has recently drawn attention to the growing interest in occupational stress as `many organizations are now smaller, with fewer people doing more and feeling much less secure. New technology has added the burden of information overload as well as accelerating the pace of work with demands for a greater immediacy of reponse (e.g. WWW, faxes, emails, etc.). This `second wave' industrial revolution of contingent working, short-term contracts ... has spawned a mountain of research in the cognate area of occupational stress (pp. 1-2).

One of the most influential theories of organisational stress has been that of Karasek (1979) according to whom stressful jobs are those that combine high demands with low control or autonomy. We have obtained partial support for Karasek's model in studies carried out in two South Australian Government Departments (Dollard & Winefield 1995, 1996, 1998; Dollard, Winefield & Winefield 1999, 2001; Dollard et al. 2000).

University teaching has traditionally been regarded as a low stress occupation. Although not highly paid, academics have been envied because they enjoyed tenure, light work loads, flexibility, `perks' such as overseas trips for study and/or conference purposes, and the freedom to pursue their own research interests.

During the past fifteen years most of these advantages have been eroded in many countries. Academic salaries have fallen in real terms in countries such as the US, the UK, Australia and New Zealand. Increasing numbers of academic positions are now untenured; work loads have increased; and academics are under increased pressures to attract external funds for their research and to `publish or perish'. As Shirley Fisher (1994) says in relation to British universities in her recent book `Stress in Academic Life':

`The demands on academics have risen rapidly over the last ten years ... there has been a steady erosion of job control. All the signs are that this will continue' (p. 61).

In terms of Karasek's demand-control theory, academic work should be becoming more stressful because work demands are increasing whereas job control is decreasing (Winefield 2000). We are currently engaged in a national longitudinal study of stress in Australian university staff. In the initial phase we conducted interviews with 178 academic and general staff in 22 focus groups at 15 universities (Gillespie, Walsh, Winefield et al. 2001). We found that both academic and general staff reported a dramatic increase in stress over the past five years and academic staff reported higher levels of stress than general staff. The five most frequently cited sources of stress were insufficient funding and resources, work overload, poor management practice, job insecurity, and insufficient recognition and reward.

The higher levels of stress reported by academic staff were confirmed in a follow-up survey of 8732 staff at 17 universities by Winefield & Jarrett (2001). We found that psychological strain was higher, and job satisfaction lower, in academic staff than in general staff. We also found that academic staff in the older universities experienced less strain and greater job satisfaction than academic staff in the newer (post-World War 2) universities. By contrast, strain and job satisfaction among general staff were less influenced by university age.

Higher stress levels among academic staff than general staff were also reported by Winefield and Jarrett (2001) in their study of staff at the University of Adelaide conducted in 1994.

The overall levels of psychological distress were disturbingly high with nearly half of the respondents (49.7%) being classified as possible `cases'--scoring 2 or more on the 12-item version of the General Health Questionnaire (Goldberg & Williams, 1988). This compares with less than 20% (19.2%) in the recently published study of the mental health of Australians by Andrews et al. (1999), based on a sample of 10,600. These results have serious implications for the mental health of Australian university staff (Winefield, Gillespie, Stough, Dua, & Hapuarachchi, 2002). We are conducting more detailed analyses of the results which will lead to recommendations for interventions. The overall results will be published and individual reports for each university will be sent, in confidence, to its Vice Chancellor. A second survey will be conducted in 2002.

We anticipate that a key outcome of this research will be the development of strategies aimed to reduce the stress of academic work and thereby make it more attractive to talented and creative individuals.

6. Future Research Directions

First, I anticipate that research into the psychological (and health) effects of unemployment, and organisational stress will continue to engage organisational psychologists over the next two decades. As jobs become more stressful, it will become increasingly difficult to demonstrate that unemployment has negative effects so that, as Fryer and I have argued, the fields of research into unemployment distress and employment stress are likely to merge (Fryer & Winefield 1998; Winefield & Fryer 1996). Moreover I believe that theoretical explanations encompassing the general area of `unsatisfactory employment' will become increasingly influential. Indeed, there are clear parallels between theories such as relative deprivation theory and income inequality theory (which have been proposed to explain the psychological effects of unemployment and underemployment, see earlier) and the effort-reward imbalance theory of organisational stress which assumes disequilibrium between the amount of effort involved in performing a job and the reward received (Siegrist 1998). The latter theory could well be applied to unemployed people who, as Fryer and Winefield suggest: `....can be regarded as involuntary, poorly paid, low status, insecure, public service workers with virtually no negotiating rights whose work (persistent hopeless search for jobs which don't exist, managing households on inadequate resources and participation in humiliating bureaucratic rituals) carries massive risk of occupational strain' (p. 16).

A second development that I anticipate is increased research interest in mature age employment. Demographic trends in many developed countries, including Australia (Auer & Fortuny 2000), suggest that governments will soon be encouraging older workers to remain in the workforce as well as encouraging employers to engage and retain them. Four demographic trends that are driving this are the ageing generation of post-war baby boomers, early retirement, increasing longevity and declining birthrates. As the population becomes increasingly top heavy in terms of age as a result of these demographic trends, governments and policy makers are beginning to worry that the future workforce may be unable to sustain an increasing population of older retirees (Bishop 1999).

Rob Ranzijn, Ed Carson and I have recently embarked on a new study concerned with mature age unemployment and underemployment (`Measuring and managing the intellectual capital of the ageing workforce'). Our project addresses the problem of measuring the unique skills (`intellectual capital') possessed by older workers, as well as their attitudes to employment. We are also planning to explore attitudes of employers towards older workers and hope to be able to demonstrate how their workplace skills can best be utilised.

The following research collaborators are acknowledged: Dr Marika Tiggemann, Dr Helen Winefield, Professor Robert Goldney, Shirley Smith, Dr Maureen Dollard, Dr Con Stough, Dr Jagdish Dua, Nicole Gillespie, Judith Saebel, Dr Jack Metzer, Dr Paul Delfabbro, Professor Anne Hammarstrom, Dr Edgar Carson and Dr David Fryer. Financial support was received from the ARC, the NH & MRC, the South Australian Departments of Correctional Services, and Family and Community Services, the National Tertiary Education Union and nineteen Australian University Vice Chancellors.

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(Date of receipt of final transcript: January, 2002. Accepted by Sharon Parker and Robert Wood, Special Issue Editors.)

Anthony H. Winefield, Work and Stress Research Group, School of Psychology, University of South Australia, Adelaide, SA, 5000. Email: [e-mail]

Anthony Harold (Tony) Winefield was born in England and received his PhD in psychology from University College London. He is currently Foundation Professor of Psychology and Co-Director of the Work and Stress Group at the University of South Australia and an Honorary Visiting Research Fellow at the University of Adelaide. His current research interests include the psychological effects of unemployment and underemployment and organisational stress.