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Low Self-esteem May Predict Unemployment

Once unemployed, mid-level employees suffer primarily from loss of income, while senior-level leaders mostly resent the loss of respect; of all employee categories, production and service workers are most likely to become unemployed. These are some of the findings summarized in the paper 'The dynamics of subjective social status associated with loss of employment: an analysis of occupational differences', which was presented by Anna Zudina, Junior Research Fellow of the Centre for Labour Market Studies, at the Ninth Yuri Levada Memorial Conference on Contemporary Russian Society and Sociology hosted by HSE.

In addition to any loss of income, becoming unemployed also causes psychological and social trauma that affects people differently depending on their occupation and position.

‘The levels of subjective happiness and life satisfaction tend to drop significantly following the loss of one's source of income and basis for persona identity’, according to Zudina. However, for certain occupations, becoming unemployed also means less work-related stress. Therefore, paradoxically, high-level professionals and leaders may actually feel better once out of a job.

Lost Status

Zudina uses the concept of 'subjective social status' to measure changes in self-esteem following the loss of employment. ‘[Subjective social status] reflects an individual's perception of his or her place in the social hierarchy’ Zudina explains, adding, ‘a significant body of research confirms that the perception of one's place in society determines both an individual’s behaviour and attitudes towards social processes’. Employment is a major factor influencing one's subjective social status.

Zudina examined whether a person’s occupation makes a difference in terms of subjective social status following the loss of a job, which gives us a better idea of the relative impact that becoming unemployed has on various occupational groups.

Zudina makes an important distinction between two scenarios of unemployment:

  • being unemployed and seeking employment unsuccessfully. This situation is damaging to one's identity, mental health and life satisfaction. For many people, it also means that even after finding a new job, they will have to accept lower living standards than before;
  • being economically inactive, i.e., being unemployed and not seeking a job. Depending on the reason for economic inactivity, it may or may not have a negative impact on self-esteem. Thus, not having a job for reasons such as raising a child, being retired or getting an education is not associated with personal failure or shortcomings and does not affect one's self-esteem.

Mid-level Employees Suffer More

Zudina used the 2000-2012 employment data from the Russia Longitudinal Monitoring Survey (RLMS) to identify respondents who lost their jobs and then became either unemployed job seekers or economically inactive individuals. Any informal or irregular employment was excluded from the analysis.

Her study examined three indicators of subjective social status based on respondents' assessment of their status in society on a nine-point scale:

  • wealth vs. poverty (i.e., subjective material well-being);
  • subjectively perceived power; and
  • feeling respected by others.

The findings show that the overall likelihood of becoming unemployed is low at just 2%, while the average likelihood of becoming economically inactive stands at 5%. More than 40% of job seekers eventually find formal employment, in contrast to just 8% of economically inactive individuals who seem to have a harder time finding (or even seeking) formal employment after a period of inactivity.

Further analysis identified which occupations were particularly likely to experience a major decline in certain aspects of subjective social status following loss of employment. Production workers (of all skill levels) and mid-level professionals are more likely than others to report a drop in material well-being; mid-level professionals and clerical workers tend to suffer from a subjective loss of personal power once out of a job, and senior-level leaders, alongside mid-level professionals and low-skilled production workers, often resent the loss of respect they used to enjoy as part of their status.

According to Zudina, ‘Mid-level professionals are the only category to report a decrease in all three aspects of subjective social status’.

Zudina also found that in certain occupational groups, workers who eventually lost their jobs had lower self-esteem prior to unemployment compared to those who kept their jobs.

Self-selection in Unemployment

Transition from employment to inactivity, as opposed to job seeking, has a greater impact on self-esteem, affecting a wider range of occupations in multiple ways. In this context, subjective material well-being and feeling respected by others are often correlated.

High-level and mid-level professionals tend to experience a decline in subjective social status in terms of material well-being, while senior-level leaders report feeling less respected and less powerful, as do high-skilled and medium-skilled production workers and high-level professionals.

A regression analysis confirmed that of all categories, only mid-level professionals suffered a decline in all three aspects of their subjective social status after losing a job.

Groups with a higher relative risk of unemployment (production and service sector workers) hardly experience any negative shift in self-esteem after losing a job, which is usually limited to a perceived drop in material well-being. Zudina suggests that these occupational categories are less sensitive to loss of employment, because employment does not contribute much to their subjective social status, which is fairly low with or without a job.

Senior-level leaders and high-level professionals tend to be more affected by the transition to economic inactivity. Mid-level professionals and skilled workers experience a significant drop in perceived material well-being and in feeling respected, due to reputational losses associated with unemployment, according to Zudina.

In conclusion, Zudina suggests that unemployment is at least partially driven by self-selection of employees with lower self-esteem who seem to be aware, even before the loss of employment, that their current education, skills and competences are insufficient for the job.


Author: Гринкевич Владислав Владимирович, June 16, 2015