A new Canadian study suggests workers hired on short-term contracts show more signs of mental health problems than those employed permanently.

The research, conducted by McGill University, also reports that the effects on mental health when working a temporary job become more severe with time.

Researchers analysed data over a 10 year period (1992-2002) and found that temporary workers exhibited, on average, two more symptoms of depression than full-time employees.

Those who continued in temporary employment four years on had an “..increased depression risk…suggesting a cumulative effect.”

Reports in the US and Canada show that temporary employment increased twice as rapidly as permanent employment growth and short-term contract workers typically earned 16 per cent less per hour.

The research suggests that employing workers on temporary contracts isn’t cost-effective for businesses as the effects of a workforce suffering anxiety and depression increases levels of absenteeism and lowers levels of productivity.

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