Effects of unemployment insurance duration on mental and physical health

Abstract

Using administrative data for Upper Austrian workers from 2003–2013, we show that a 9-week extension in unemployment insurance (UI) duration increases nonemployment length by 4 days, on average, and impacts worker physical and mental health. These effects vary by gender. Specifically, we find that female workers eligible for an additional 9 weeks of UI benefits reduce opioid and antidepressant prescriptions by 0.5 percentage points (50%) and 0.9 percentage points (11%), respectively. Moreover, we find some evidence of beneficial within-household spillovers for young children. For male workers, we find little evidence of health effects of extending UI benefit duration. We posit that these differential effects are driven by a combination of income and occupational changes that also vary by gender.