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Sickly Insecure? : a study of worker responses to reduced job security using the financial shock that hit the norwegian petroleum industry

Engebretsen, Pernille; Kjøle, Emilie Marie
Master thesis
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URI
http://hdl.handle.net/11250/2455403
Date
2017
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  • Master Thesis [4657]
Abstract
A large body of literature has sought to examine how job loss a↵ects those who

have been displaced following an economic downturn. However, far less e↵ort has

been dedicated to investigate the fear-of-unemployment e↵ect which may arise. This

thesis contributes to existing literature by investigating how employees respond to

reduced job security. Research on the matter tends to be inconclusive in regards to

establishing a clear link between job insecurity and health. We exploit the sudden

and substantial drop in oil prices that hit the Norwegian petroleum industry in the

autumn of 2014, allowing us to identify the e↵ect of reduced job security on sickness

absence. In order to address this issue, we take usage of data retrieved from the

Norwegian Labour Force Survey. Existing literature suggests that exposure to job

insecurity could lead to opposing e↵ects when it comes to health. For instance, it

is argued that a tougher labour market represents a health hazard, whereas some

believe that job insecurity works as a disciplinary device. We find no evidence

suggesting that job insecurity has a causal e↵ect on sickness absence. This result is

consistent when subject to a number of heterogeneity tests and is robust to several

specification checks. Nonetheless, there may be rational explanations as to why

we obtain a null e↵ect, such as the two opposing, non-mutually exclusive e↵ects

cancelling each other out.

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