Employment insecurity and life satisfaction: The moderating influence of labour market policies across Europe

Abstract
This article tests whether the link between employment insecurity and life satisfaction is moderated by the generosity of labour market policies across Europe. Employment insecurity provokes anxieties about (a) the difficulties of finding a new job and (b) alternative sources of non-work income. These components can be related to active and passive labour market policies, respectively. Generous policy support is thus expected to buffer the negative consequences of employment insecurity by lowering the perceived difficulty of finding a similar job or providing income maintenance during unemployment.

Based on data for 22 countries from the 2010 European Social Survey, initial support for this hypothesis is found. Perceived employment insecurity is negatively associated with life satisfaction but the strength of the relationship is inversely related to the generosity of labour market policies. Employment insecurity, in other words, is more harmful in countries where labour market policies are less generous.