The impact of working conditions on mental health: Novel evidence from the UK

Abstract

This paper investigates the causal impact of working conditions on mental health in the UK, combining new longitudinal data on working conditions from the European Working Conditions Survey with microdata from the UK Household Longitudinal Survey (Understanding Society). Our empirical strategy accounts for the endogenous sorting of individuals into occupations by including individual fixed effects. We address the potential endogeneity of occupational change over time by focusing only on individuals who remain in the same occupation (ISCO 3-digit), exploiting the variation in working conditions within each occupation over time. This variation, determined primarily by general macroeconomic conditions, is likely to be exogenous from the individual point of view.Our results indicate that, for female workers, improvements in working conditions such as skills and discretion, working time quality, and work intensity improve mental health outcomes such as loss of confidence, anxiety, social dysfunction, and risk of clinical depression. These effects are clinically relevant and substantial for younger and older female workers and larger for workers in occupations characterised by an inherently higher level of job strain. We detail how different dimensions of job quality impact different mental health outcomes for different age groups. Our results have important implications for public policies and firms which aim to improve workers’ wellbeing and productivity through workplace interventions focused on mental health.