Stress and the Post-Covid Economy

Stress and the Post-Covid Economy
2021-04-01

April is Stress Awareness Month. Established by the Stress Management Society in 1992, it tries to highlight ways of moving from ‘distress to de-stress’.  According to data from the UK Health and Safety Executive, there were 17.9 million working days lost to work-related stress, depression or anxiety in 2019/20 – affecting more than 800,000 workers.  The lockdowns implemented by governments due to COVID-19 and the resulting significant economic and workplace changes that have taken place have impacted stress levels among workers and the rest of the population.  So there are important public health, business resilience and worker well-being aspects to thinking about stress in the labour force

Economists have been increasingly interested in the well-being of workers both because it says something about their productivity and behaviours and because the health implications of low levels of well-being.  However, only recently have economists really been focusing on ‘stress’ directly.  In part this is because stress is a hard concept to measure due to its subjectivity.  While this can be useful in some applications, in other applications, particularly if one is trying to link work activities to physiological responses, subjective measures of stress are less useful.

One way to examine stress objectively is to measure cortisol, the so-called ‘stress hormone’, which the body produces naturally in response to stress.  There is a large research literature in medicine and (health) psychology that examines what factors trigger cortisol, but increasingly economists are getting interested too.  One such project is a current one here at Aberdeen where a number of us are looking at the stress effects of performance-related pay (PRP).  While PRP has been shown in previous research to generate ill health like in research by my colleague Prof Ioannis Theodossiou and me in 2014 in Oxford Economic Papers, this ESRC funded project hypotheses that stress is a key mechanism that links PRP to health.  In a series of economics experiments, salivary cortisol measures are taken as subjects are given PRP or nonPRP payment ‘contracts’.  Early results from these experiments show that PRP is associated with higher levels of cortisol response compared to other employment contracts.  A podcast about the project was recorded as part of the University of Aberdeen’s 2020 Explorathon Public Engagement initiative and can be found here.

The labour market response to the pandemic will be an interesting one to examine through the lens of worker well-being and stress.  Much has been made about the pandemic causing more ‘flexibility’ in how work is done.  In economic, employment relations and human resource management research, a lot has been written about the potential usefulness of thinking about more flexible arrangements in work, particularly around increased flexibility in hours.  For example to meet the complex demands of caring responsibilities (e.g. caring for children or elderly adults), more flexible hours of work might be a useful way for employers to cater to the needs of such workers, many of them women.  Indeed, adding more flexibility in how people work can be an important element of supporting workers to find a better work-life balance.

In a recent talk I gave at Stirling University, I explored some of the stress and health consequences of new forms of work post-COVID, particularly around the growth of so-called ‘gig’ jobs or zero-hour contracts where workers are given no guarantee of work on any particular day.  While firms may prefer these kinds of contracts as it gives them the maximum amount of flexibility to meet daily demand for work and some workers like the flexibility to work when they are free, there are downsides to these jobs – namely that the stream of earnings is very uncertain and variable.  This is particularly challenging for workers who may need to depend on a constant stream of income (e.g. those with dependents or a mortgage).  These contracts can generate stress given the uncertainty of the earnings stream. This is consistent with  previous research by Ioannis and me where we show in a 2018 paper in the Review of Income and Wealth, that there is a strong link between the longer time spent in flexible work such as ‘gig’ jobs and worse health outcomes.  Further work by Dr Dan Kopasker (at HERU), Prof Catia Montagna and me published in 2018 in SSM-Population Health shows that work-related insecurity negatively impacted the General Health Questionnaire index which is strongly correlated with stress.

Clearly, there will be fundamental changes in the labour market and the very nature of work once the pandemic is brought under control.  However, it will be incumbent upon workers, governments and employers to make sure that the new systems of work minimise the amount of stress and negative well-being in the new forms of work.  Perhaps it will be impossible to avoid these more flexible systems, but that does not mitigate the responsibilities of all parties to think of creative ways to minimise the negative health effects that may be generated by more stressful employment relationships.

References:

  • K. A. Bender and I. Theodossiou, “The Unintended Consequences of the Rat Race:  The Detrimental Effects of Performance Pay on Health,” Oxford Economic Papers, 66(3), July 2014: 824-47.
  • K. A. Bender and I. Theodossiou, “The Unintended Consequences of Flexicurity: The Health Consequences of Flexible Employment,” Review of Income and Wealth, 64(4), Dec 2018: 777-99.
  • D. Kopasker, C. Montagna and K. A. Bender, “Economic Insecurity: a Socioeconomic Determinant of Mental Health,” SSM: Population Health, 6, 2018: 184-94.
Published by Business School, University of Aberdeen

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