The Impact of Global Economic Crisis and Austerity on Quality of Working Life and Work‐Life Balance: A Capabilities Perspective

• Date: 01 December 2019
• Author: T. Alexandra Beauregard,Rea Prouska,Uracha Chatrakul Na Ayudhya
• DOI: http://doi.org/10.1111/emre.12128
• Published date: 01 December 2019

The Impact of Global Economic Crisis and

Austerity on Quality of Working Life and

Work-Life Balance: A Capabilities Perspective

URACHA CHATRAKUL NAAYUDHYA,

1

REA PROUSKA

2

and T. ALEXANDRA BEAUREGARD

1

1

Middlesex University Business School, London, UK

2

London South Bank University, London, UK

This paper draws on the capabilities approach as a framework for examining the impact of the global economic

crisis and austerity on quality of workinglife and work-life balance. Our paper focuses on Greece, an extreme case

of a country in economiccrisis, characterizedby a weak institutional basis. We build on thework of Barbara Hobson

and colleagues who first applied the capabilities approach to explore work-life balance capabilities. Our study

contributes to the development of theory by emphasizing the sense of entitlement concept within the capabilities

approachand by proposing a modifiedconceptual framework that encapsulates the link betweencapabilities, agency,

and the sense of entitlement, where the latter acts as a cognitive ‘filter’that enhances or weakens an individual’s

perception of her/his agency to enact on her/hiscapabilities. Drawing on the accounts of twentyGreek professional

and managerialworkers, we illustratehow the crisis and austeritymeasures have erodedworking conditions andthus

the sense of entitlement, leading to the weakening of our participants’agency and capabilities to achieve quality of

working life and work-life balance.

Keywords: qualityof working life; work-lifebalance; capabilities approach; agency; senseof entitlement; economic

crisis; austerity; Greece

Introduction

The severity of the impact of the recent economic

crisis has varied considerably between European

nations. For example, Germany, Belgium and Austria

experienced minimal labour market turbulence

(O’Reilly et al., 2011; Eurofound, 2013a), while the

UK did not experience as high a growth in

unemployment as was projected (Lallement, 2011). In

contrast, the European periphery (Greece, Ireland and

Spain) was hit by an employment decline of more

than 10% (Hurley and Storrie, 2011). In addition,

national responses to the crisis also varied (Bach and

Bordogna, 2013). For example, Greece, Ireland, Italy,

Portugal and Spain implemented the largest austerity

cuts, but France –which experienced high financial

vulnerability in 2012 –vigorously resisted austerity

measures. The UK, on the other hand, committed to

strict austerity measures yet escaped the financial

vulnerability of the more peripheral European nations.

This can be at least partially explained by the fact that

nations with stronger institutional bases in terms of

employment policies, employment protection, industrial

relations and social protection (e.g., France and

Germany) implemented labour market policies that

compensated employees working fewer hours during

the crisis (Gennard, 2009). This is in contrast to

peripheral nations with weaker institutional bases

(e.g., Greece, Cyprus, Hungary, Czech Republic and

Slovakia), where the economic crisis had a significant,

negative impact on employment and pay conditions

(Eurofound, 2013b).

In terms of the employment experience, the economic

crisis has been studied for its impact on job insecurity

and work pressure (Mellahi and Wilkinson, 2008; Datta

et al., 2010; Chung and Van Oorschot, 2011; Russell

and McGinnity, 2014; Prouska and Psychogios, 2016).

Many organisations responded to the crisis by cutting

labour costs, either by reducing recruitment,

Correspondence: T. Alexandra Beauregard, Middlesex University

Business School, The Burroughs, London NW4 4BT, UK. E-mail:

a.beauregard@mdx.ac.uk

DOI: 10.1111/emre.12128

©2017 The Authors European Management Review published by John Wiley & Sons Ltd on behalf of European

Academy of Management (EURAM)

This is an open access article under the terms of the Creative Commons Attribution License, which permits use,

distribution and reproduction in any medium, provided the original work is properly cited.

European Management Review, Vol. 16, 847–, (2019)

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implementing pay cuts, restructuring, downsizing, or

instituting layoffs (Iverson and Zatzick, 2011; Naude

et al., 2012). Such strategies often have a negative

impact on ‘survivors’: increased working hours, work

intensification, job insecurity, and stress, and decreased

pay, benefits, training and development opportunities,

motivation, productivity, and loyalty (Allen et al.,

2001; Spreitzer and Mishra, 2002; Kalimo et al.,

2003; Gandolfi, 2008; McDonnell and Burgess, 2013).

Research has also identified the negative impact of the

economic crisis on employee physical and mental health

(Kim, 2003; Bakker and Demerouti, 2007; Maslach and

Leiter, 2008; Bible, 2012; Kondilis et al., 2013), when

intense working schedules become the new standard

(McCann et al., 2008).

All of this has implications for workers’quality of life

and how they experience the work-lifeinterface as a result

of the economic crisis. Conflict between work and non-

work activities has established itself as a predictor of

reduced work effort and performance, increased

absenteeism and turnover, lower levels of job satisfaction

and organisational commitment, and increased stress and

burnout (for a review, see Beauregard and Henry, 2009).

Difficulty in combining paid work with non-work

commitments can therefore yield harmful repercussions

for individuals, employers, and society with respect to

productivity and health costs. Studying the work-life

interface within the recent context of the economiccrisis,

which has affected the trajectory of work-family

reconciliationin terms of the direction and pace of change

in welfare regimes and institutional settings (Gregory,

Milner and Windebank, 2013), is therefore of significant

value. The effects of the economic crisis on work-life

outcomes are dependent on context (Goergen et al.,

2013), with some observable differencesbetween nations.

Shahidi (2015) found that where fiscal consequences of

the crisis were acute, the welfare state was undermined

and conditions were created for the recommodification

of labour market policies. This has led to considerable

disparity in how governments have responded to the

crisis, particularly in terms of policies relating to the

work-life interface.

Most European literature on the work-life interface has

concentrated thus far on institutionally strong countries,

such as the UK, France, Germany and the Netherlands

(e.g., Gregory and Milner, 2008; Lewis et al., 2008,

2016; Annesley and Scheele, 2011; Harkness and Evans,

2011; Fagan and Norman, 2012; Hofacker and Konig

2013). Fewer studies have focused on the European

periphery (e.g., Giannikis and Mihail, 2011; Glaveli,

Karassavidou and Zafiropoulos, 2013), while the impact

of the economic crisis on the work-life interface in this

region is equivalently under-researched (e.g., Grau-Grau,

2013; Pasamar andRamón, 2013; Riva, 2013). Our paper

addresses this gap by drawing on data from Greece, an

extreme case of a country in economic crisis, which is

characterized by a weak institutional base and turbulent

economic conditions.

The aim of this paper, therefore, is to explore the

experiences among a group of workers in Greece through

the capabilities approach as a framework for examining

the impact of the economic crisis and austerity on quality

of working life and work-life balance. Our study

contributes to the development of theory by emphasising

the sense of entitlement concept within the capabilities

approach and by proposing a modified conceptual

framework thatencapsulates the link between capabilities,

agency, and the sense of entitlement, where the latter acts

as a cognitive ‘filter’that enhances or weakens an

individual’s perception of her/his agency to enact her/his

capabilities.

We now divide the paper into three sections. First, we

introduce the capabilities approach as a framework for

analysing well-being, quality of life and work-life

balance. We then focus on the importance of the sense

of entitlement within the capabilities approach as a key

concept for contextualising workers’perceptions of their

capabilities. In the second section, we outline the context

of the economic crisis and the impact on quality of

working life and the work-life interface in Greece and

set out the details of ourstudy within this context. Finally,

we discuss our findings on capabilities to achieve quality

of working life and work-life balance.

The capabilities approach as a framework

for achieving quality of life and work-life

balance

The capabilities approach is a ‘framework of thought’

rather than a specified theory, which provides an

evaluative space to assess well-being and quality of life

of individuals (Hobson, 2011). It is based on the work of

Amartya Sen, whose original focus is on the promotion

of human development through agency and an

individual’s freedom to choose a life that s/he wants

(Hobson et al., 2011; Miles, 2013; Nambiar, 2013). It

provides a framework for considering the real freedom

for individuals to pursue goals that they regard as

important and has reason to value in relation to their

quality of life. The framework places an emphasis on

understandingwhat is genuinely possiblefor an individual

to pursue withincontext, rather than what maybe possible

in principle in the abstract concept of individual free

choice (Fagan and Walthery, 2011).

There are several core concepts in the capabilities

approach. The first is ‘functionings’, which is about what

an individual is and does in order to achieve well-being

and quality of life in the way that s/he regards as

important. In other words, functionings are life outcomes

U.C Na Ayudhya et al.

©2017 The Authors European Management Review published by John Wiley & Sons Ltd on behalf of European

Academy of Management (EURAM)

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