Unemployment, unemployment duration, and health: selection or causation?

Abstract

This study aims at disentangling the causal effects of unemployment on physical and mental health from the selection of the unhealthy into unemployment. To identify causal effects, it explores hypotheses concerning how physical and mental health deterioration gain additional momentum with a longer duration of unemployment. In contrast, mere selection into unemployment implies time-constant effects of unemployment on physical and mental health. Fixed-effects models are applied to data from the German Socio-Economic Panel (GSOEP, 2002-2014, 74,572 observations). Pointing at causal effects of unemployment, the findings show that physical health does not deteriorate before, during or immediately after the period in which individuals lose their jobs, but that deterioration gains momentum later. The effect further depends on age at transition to unemployment. In contrast, a large part of the poorer mental health of the unemployed might be due to the selection of the unhealthy into unemployment; mental health declines even before job loss. Only for people who experience unemployment early in life, mental health deterioration gains some momentum in the time after the transition, indicating a (weak) causal effect of unemployment on mental health for younger individuals.

Economic insecurity: A socioeconomic determinant of mental health

“…Many studies provide unequivocal evidence of the negative effects of unemployment on mental health (for example, Clark & Oswald, 1994 ; Theodossiou, 1998 ; Clark, 2003 ; Stauder, 2018 ). 1 Less attention has been paid to the health effects of a fear of unemployment or expected financial hardship, although Bender and Theodossiou (2017) find that precarious work leads to worse physical health.…”

Unemployment and health-related quality of life in melanoma patients during the COVID-19 pandemic: A web-based cross-sectional study

“…A review indicates that higher spending on cancer is consistently associated with lower mortality [14]. In other words, loss of income and work-related bene ts experienced by the unemployed may lead to adverse health outcomes [15]. Unemployment of the family members further impairs the social support and nancial source, resulting in the unaffordability of the advanced therapies and, the progression of cancer and mental stress.…”

Common Mental Disorders and Work

“…• In yet another study, a considerable long-term selection of the physically unhealthy into unemployment was foundthe mental health of the observed participants in the study had deteriorated even before the unemployment started (Stauder 2018).…”