Workers' fears of losing their jobs are at their highest level since the Second World War, and the stress is taking its toll on their physical well-being.
The report, Job Insecurity and Work Intensification, published by the Joseph Rowntree Foundation, found that two thirds of employees said they regularly worked overtime.
Just over 30% of full-time male employees claimed they worked more than 48 hours a week.
And 39% of all interviewees said their hours had increased in the past five years.
However, the main stress was caused by intensity of work, due mainly to staff cutbacks.
More than 60% of the 300 employees interviewed said the pace of work had increased over the past five years.
Half said staffing levels at their work were either inadequate or "very inadequate".
The report found that those admitting to the greatest feelings of insecurity were five times more likely to be in poor health.
Poor trust
The report says many employees did not trust their managers, although good working relationships were an important factor in overall health.
Forty-four per cent said managers could not be properly trusted to look after their best interests.
Even those whose companies had policies of no compulsory redundancies were not convinced that their bosses would actually stick to them in a crisis.
Many employees were not very worried about losing their job, but they did fear changes in the way they did their job, for example, pressure to do more work and loss of opportunities for promotion.
A quarter said their prospects of promotion had decreased in the past five years.
The study showed that more supportive relationships between managers and staff helped relieve some pressure and had a positive effect on health.
But the researchers, from the University of Cambridge, said this did not tackle the root cause of the problem - reduced staffing levels caused by market pressures.
And they said some forms of support, such as appraisal schemes, could create more stress for staff.
They call for more policies to regulate the labour market and conclude that regulation should "allow for creative, rather than destructive, competition".
Background Briefings
Medical notes
Stress at work: the pros and cons
(13 Apr 99 | Medical notes)
Stress at work debate begins
(08 Apr 99 | Health)
Joseph Rowntree Foundation
Work and stress
Health and Safety Executive
The BBC is not responsible for the content of external internet sites.
Links to other Health stories