The financial and economic crisis which started in 2008 has increased poverty and unemployment across Europe. Unemployment insurance is a form of social protection that provides an income when people become unemployed, and it seems reasonable to assume that it can help prevent the slide into poverty and associated material hardship, homelessness and other situations that aggravate ill-health. However, studies examining unemployment insurance have usually taken social expenditure or welfare regime as the basis for analysis, approaches that appear to lead to inconclusive or even contradictory results.
The purpose of this research by Tommy Ferrarini, Kenneth Nelson & Ola Sjöberg from the Swedish Institute for Social Research at Stockholm University was to analyse the role of unemployment insurance on self-rated health in the working age population at the onset of the financial crisis in Europe. They used institutional-level data on coverage and replacement rates in unemployment insurance (SPIN) and EU-SILC panel data covering 23 European countries.
They show that unemployment insurance reduces chances of experiencing ill-health. Increased coverage rates seem to have a stronger effect than the level of replacement (the amount to which the unemployment insurance replaces wages lost), though the effects are intertwined. Moreover, unemployment insurance seems to be particularly effective in reducing chances of experiencing ill-health among individuals with low educational attainment.
Unemployment insurance also had a positive effect on the health of employed people. Previous research by Wilkinson & Marmot suggested that even the possibility of becoming unemployed can lead to ill-health, through stress. This new research indicates that unemployment insurance can counteract this psychosocial mechanism, providing financial support to support material needs for those who become unemployed and a psychological safety net for those in work.
Unemployment insurance and deteriorating self-rated health in 23 European countries was published in the Journal of Epidemiology & Community Health on 10 March 2014. To access the paper click here.
