I think the idea here is that when you're on contract, you are much more aware that your employment is time-limited and transactional.

So you live your life, financially and otherwise, with this in mind.

I have no doubt that this sounds (and would be) more stressful for some people, when compared to full-time employment, particularly in the US where your job is typically tied to health care and other benefits.

But most folks I know who have been laid off from long-term employment were shocked by (and ill-prepared for) the event.