What explains the negative effect of unemployment on health? An analysis accounting for reverse causality

Abstract

The unemployed are often in poorer health than their employed counterparts. This cross-sectional correlation is often attributed to a causal effect of unemployment on health. Resent research analyzing longitudinal data, however, often supports alternative explanations, such as spurious correlation and/or selection of unhealthy workers into unemployment (i.e., reverse causality). In this paper, we apply a dynamic panel data estimator (system GMM) to account for both unobserved confounders and reverse causality. Despite some evidence for health selection, we still find strong support for the causality thesis. Furthermore, we show that the adverse health effect is partially explained by the loss of self-perceived social status due to unemployment but not by the loss of household income or social contacts.

The role of social integration in the adverse effect of unemployment on mental health – Testing the causal pathway and buffering hypotheses using panel data

“…In contrast, both the number of strong ties and the amount of conflict in the household had statistically significant impacts on mental health, but there was no corresponding effect of unemployment on these two measures. In all, our results are in line with the previous, albeit limited, empirical evidence regarding the potential of unemployment to exert detrimental mental health effects via its adverse effects on social integration, including the only fixed effects regression (that we are aware of) that addresses the causal path hypothesis (Krug, Eberl 2018).…”

“…Janlert and Hammarström (2009) used data from 1,044 school leavers and found that the amount of social support at age 30, measured by the availability of social interaction and the availability of attachment, mediates the negative effect on physical health of the total amount of time in unemployment between the ages of 16 and 30 but not the negative effect of the same variable on mental health. Janlert and Hammarström (2009) used longitudinal information, but to the best of our knowledge, the only study that used panel data and explicitly controlled for unobserved confounders was from Krug and Eberl (2018). Based on a general population survey and panel data regressions, the authors found that neither the number of strong ties (close friends and relatives outside the household) nor the availability of weak ties through memberships in voluntary leisure organizations mediates the causal effect of unemployment on selfrated health and mental health.…”

“…However, household income might not be a perfect measure of the manifest function of work, and other indicators, such as relative deprivation or poverty, should be considered in future research. As for status loss as an alternative explanation, although the paper byKrug and Eberl (2018) found empirical evidence for an indirect effect via the loss of subjective social status, the paper left open the degree to which this measure not only reflects the unemployed`s self-esteem but also reflects external status attributions and is thus a reaction to experiences with their immediate social environment or society as a whole. In short, we have aimed to contribute to understanding the role of social integration, but given the long tradition of empirical research, many questions regarding alternative pathways or buffering factors surprisingly remain open and await further empirical investigation.…”

The association between employment and the health of people with intellectual disabilities: A systematic review

“…In the UK, the consensus on pursuing a "welfare to work" agenda for people with disabilities generally (Department for Work and Pensions & Department of Health, 2017) has been underpinned in part by the rhetoric of better health and mortality outcomes associated with employment (Black, 2008). Whilst the causal pathways between employment and health have been reasonably well-established in the general population (Bartley, 1994;Janlert & Hammarström, 2009;Krug & Eberl, 2018), at present, there is insufficient evidence to determine causality in relation to the association between employment and health for people with intellectual disabilities. Further research to determine specific health benefits attributable to employment for people with intellectual disabilities is required, as well as research to elucidate the causal pathways that operate with reference to existing models on the relationship between (un)employment and health in the general population (e.g., Janlert & Hammarström, 2009, Paul & Moser, 2006.…”

A Conceptual Model and Measurement of Identity-Based, Existential Annihilation Anxieties (EAA)

“…Additionally, threats to social identity status in severe discriminations, intense power, and status struggle (e.g., caste system, slavery), and unemployment are not directly included in any of current popular frameworks. The loss of self-perceived social status but not the loss of income or social support explained a significant variance for the adverse health effects of unemployment (Krug, & Eberl, 2018). While anxieties about existence can vary in their intensities, existential annihilation anxieties (EAA) represent the severe endpoints in the continuum of such anxieties.…”