Unraveling the Complex Relationship Between Work Transitions and Self-Esteem and Life Satisfaction

Transitions in and out of work are common experiences with major repercussions for people’s lives. The complex link between work transitions and psychological adjustment is not well understood, however. In this preregistered study, we analyzed 11 waves of longitudinal data from 13,671 participants (representative of the Dutch population) to examine the transactional effects between repeated work transitions (employment and unemployment) and psychological adjustment (self-esteem and life satisfaction). Specifically, we investigated change trajectories before and after the transitions and tested whether moderator variables predicted individual differences in change. Participants with lower levels of self-esteem and life satisfaction were more likely to experience unemployment and less likely to experience employment transitions, indicating selection effects. Participants decreased in their self-esteem and life satisfaction before the beginning of the unemployment transition, indicating anticipatory socialization effects. These effects did not differ for multiple experiences of the same transition. Participants showed larger increases in life satisfaction in response to employment transitions when they experienced higher levels of job satisfaction. Participants showed larger decreases in self-esteem before unemployment transitions when they experienced a longer duration of unemployment. Our findings point to bidirectional effects between work transitions and self-esteem and life satisfaction, which is consistent with transactional theories. They also highlight the importance of the timing of changes before and after work transitions, the dynamic nature of the transition-adjustment link, and the existence of individual differences in psychological adjustment to work transitions that were linked to characteristics of the corresponding transition.