State Intervention and Mental Well-being Among the Unemployed

Abstract

Although the relationship between unemployment and poor mental well-being has long been an area of interest within behavioural science, the role of state intervention in the unemployment situation has not been thoroughly investigated. This article investigates how unemployment benefit systems and active labour market policy measures affect mental well-being among the unemployed in Sweden. The study uses a longitudinal and nationally representative survey of 3,500 unemployed Swedes. Three different types of active labour market policy measures involving the unemployed were studied, ‘activation’, ‘vocational training’ and ‘work-place participation’ measures. Of these only involvement in ‘workplace participation’ was found to have a clearly positive effect on mental well-being among those participating. Of the two Swedish unemployment benefit systems, the more generous income replacement Unemployment Benefits and the less generous flat rate Cash Unemployment Benefits, only access to income replacement Unemployment Benefits was found to mediate the mental well-being impact of unemployment. The positive effect of access to income replacement Unemployment Benefits was further accentuated when unemployment was prolonged. Those with access to this benefit system seemed to suffer no further deterioration of mental well-being, while the mental well-being of the rest of the unemployed further deteriorated.

Active labour market policy and its outcomes

“…On the one hand, the results are surprising because the psychological functions of work described in our theoretical section, which can be assumed to apply to workfare programmes (Strandh, 2001), should improve participants' self-efficacy. On the other hand, there are several potential reasons why One-Euro-Job participation might not lead to the desired positive results.…”

“…On the other hand, there are several potential reasons why One-Euro-Job participation might not lead to the desired positive results. As Strandh (2001) states, ALMPs have the most beneficial effects on psychological factors when participants perceive ALMPs as a legitimate substitute for employment or, in other words, when participants consider participation to be meaningful for their own lives. Although over 80 per cent of participants consider One-Euro-Job tasks to be useful, only approximately one-third of participants expect that their employment prospects will increase as a result of participation in the programme (Wulfgramm, 2011).…”

“…Strandh (2001) discusses the role of ALMP participation in this context. First, ALMP participation creates a life situation for a participant that might resemble employment more than unemployment.…”

Does Active Labour Market Policy have an Impact on Social Marginalization?

“…For instance, Andersen (2008) and Oddy et al . (1984) are both based on English panel data; Strandh (2001) and Korpi (1997) on longitudinal survey data from Sweden; and Creed et al . (1998) on cross‐sectional data from Australia.…”

“…1984; Korpi 1997; Creed et al . 1998; Strandh 2001; Andersen 2008). As mentioned earlier, however, the research designs, empirical background and not least the respective theoretical perspectives in these studies differ from our study, which is why it seems plausible for different results to occur.…”