NILS Working paper no 166. Are casual and contract terms of employment hazardous for mental health in Australia?

The risk that flexible forms of employment are harmful to the health of workers is a major public health issue for the many countries, including Australia, where such forms of employment are common or have been growing. We ask whether the century-old system of arbitrated protections for workers and the distinctive welfare state in Australia averts any such harm to mental health. If Australian workers are harmed despite these protections, this adds weight to the international concerns about the hazards of flexible employment. Employing nine waves of panel survey data and dynamic random-effects panel data regression models, we examine the mental health consequences of unemployment, and of employment on a casual or fixed-term basis, compared with permanent employment. We control for demographic and socio-economic characteristics, occupation, disabilities status, negative life events, and the level of social support. We find almost no evidence that flexible employment harms mental health. Unemployed men (but not women) have significantly and substantially lower mental health. But among the employed, only men who are on fixed term contracts, most especially graduates, have lower mental health than those who are employed on full-time permanent terms. Women have significantly higher mental health if they are employed full-time on casual terms.