Temporary Employment, Job Satisfaction and Subjective Well-being

This paper is concerned with whether employees on temporary contracts in Britain report lower well-being than those on permanent contracts, and whether this relationship is mediated by differences in dimensions of job satisfaction. Previous research has identified a well-being gap between permanent and temporary employees but has not addressed what individual and contract specific characteristics contribute to this observed difference. Using data from the British Household Panel Survey, this paper finds that a large proportion of the difference in self-reported well-being between permanent and temporary employees appears to be explained by differences in satisfaction with job security. Other dimensions of job satisfaction are found to be less important. In fact, after controlling for differences in satisfaction with security, our results suggest that temporary employees report higher psychological well-being and life satisfaction. This leads us to believe that an employment contract characterised by a definite duration lowers individual well-being principally through heightened job insecurity.