Social comparison theory predicts that unemployment should be less distressing when the experience is widely shared, but does this prediction extend beyond the unemployed to those who are at risk of job loss? Research demonstrates a link between aggregate unemployment and employed individuals’ perceptions of job insecurity; however, less is known about whether the stress associated with these perceptions is shaped by others’ unemployment experiences. We analyze a nationally representative sample of Canadian workers (Canadian Work, Stress, and Health study; N = 3,900) linked to census data and test whether regional unemployment influences the mental health consequences of job insecurity. Multilevel analyses provide more support for the social norm of insecurity hypothesis over the amplified threat hypothesis: the health penalties of job insecurity are weaker for individuals in high-unemployment regions. This contingency is partially explained by the ability of insecure workers in poor labor market contexts to retain psychological resources important for protecting mental health.
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