Does job insecurity lead to impaired well‐being or vice versa? Estimation of cross‐lagged effects using latent variable modelling

Abstract Although research suggests that job insecurity is associated with impaired employee well‐being, there is insufficient empirical evidence to draw any causal inferences since most studies are cross‐sectional and thus do not control for previous levels of health symptoms. We used longitudinal questionnaire data to investigate the direction of the relationship between job insecurity and health complaints. After controlling for prior levels of mental and physical health complaints and five other variables that could potentially confound the results (gender, age, organizational tenure, family status, and education), the results of latent variable modelling showed that the cross‐lagged effect of job insecurity on mental health complaints, one year later, was significant whereas the reversed effects of mental and physical health complaints on subsequent insecurity were non‐significant. However, there was no significant cross‐lagged effect of job insecurity on physical health complaints. The results provide empirical support for the theoretical notion that job insecurity leads to health complaints, and imply that prior levels of health should be taken into consideration in order to explain the relative effect of perceived job insecurity on the physical and mental health of the workforce. Copyright © 2003 John Wiley & Sons, Ltd.