Do unemployment benefits affect health? Evidence from the United States

Cylus, Jonathan (2015) Do unemployment benefits affect health? Evidence from the United States. PhD thesis, London School of Economics and Political Science.

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Abstract

A large body of research finds correlations between unemployment and health. This raises the question of whether unemployment benefit programs, which aim to alleviate financial stress associated with job loss, have their own health effects. Although existing studies indicate that receiving unemployment benefits is likely protective for health, most studies do not account for the potentially endogenous relationship between unemployment benefit receipt and individual characteristics. Since not all unemployed people are eligible for, or receive unemployment benefits, estimates of the health effects of unemployment benefits may be biased. This thesis aims to better understand whether unemployment benefits have a causal effect on health by taking advantage of quasi-experimental variations in unemployment benefit programs in the United States. In the first study, I investigate whether the presence of generous State unemployment benefit programs results in fewer suicides during labour market downturns. In the second study, I use longitudinal data to explore whether State unemployment benefit generosity buffers the impact of job loss on self-reported health. The third study examines whether unemployment benefit eligibility expansions lead to greater participation in physically active leisure. Lastly, I use an instrumental variables approach to estimate the self-reported health effects of receiving unemployment benefits. Across all four studies, I consistently find evidence that unemployment benefits have a health promoting effect in the short-term: unemployment benefits are associated with lower suicide rates, better self-reported health and increased physical activity. While the precise mechanisms remain uncertain, I argue that unemployment benefits may positively affect health by subsidizing income and leisure time, both of which can be beneficial for physical and mental health. Although unemployment benefits are unlikely to be a costeffective approach to improve health, the results indicate that policymaker efforts to reduce or limit access to unemployment benefits may lead to unanticipated adverse health effects.

Item Type:	Thesis (PhD)
Additional Information:	© 2015 Jonathan Cylus
Library of Congress subject classification:	H Social Sciences > HN Social history and conditions. Social problems. Social reform
Sets:	Departments > Social Policy
Supervisor:	McGuire, Alistair and Lordan, Grace
URI:	http://etheses.lse.ac.uk/id/eprint/3234

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