Health Effects of Unemployment in Denmark, Norway and Sweden 2007-2010: Differing Economic Conditions, Differing Results?

Abstract

This article investigates short-term health effects of unemployment for individuals in Denmark, Norway, and Sweden during an economic downturn (2007-2010) that hit the Scandinavian countries with diverging strength. The longitudinal part of the European Union Statistics on Income and Living Conditions (EU-SILC) data material is analyzed, and results from generalized least squares estimation indicate that Denmark is the only Scandinavian country in which health status deteriorated among the unemployed. The individual-level (and calendar year) fixed-effect results confirm the negative relationship between unemployment and health status in Denmark. This result is robust across different subsamples, model specifications, and changes in both the dependent and independent variable. Health status deteriorated especially among women and people in prime working age (30-59 years). There is, however, only scant evidence of short-term health effects among the recently unemployed in Norway and Sweden. The empirical findings are discussed in light of: (1) the adequacy of the unemployment insurance system, (2) the likelihood of re-employment for the displaced worker, and (3) selection patterns into and out of employment in the years preceding and during the economic downturn.