Health effects of unemployment benefit program generosity

Objectives: Unemployment has been linked to poorer health, but few studies identify policies that mitigate the negative health consequences of joblessness. Unemployment benefit programmes might protect health through several pathways, but a key methodological challenge is accounting for the fact that individuals who receive unemployment benefits differ from those who do not receive benefits. Methods: We link US state law data on maximum allowable unemployment benefit levels between 1985 and 2008 to individual self-rated health for heads of households in the Panel Study of Income Dynamics and implement state and year fixed effect models. Results: Unemployment is associated with increased risk of reporting poor health among men in both linear probability (Beta =0.0794, 95% CI[Confidence Interval]: 0.0623, 0.0965) and logistic models (Odds ratio[OR] =2.777, 95%CI 2.294, 3.362), but this effect is lower when the generosity of state unemployment benefits is high (Beta for interaction between unemployment and benefits=-0.124, 95% CI: -0.197, -0.0523). A 63% increase in benefits completely offsets the impact of unemployment on self-reported health. Conclusions: Results suggest that unemployment benefits may significantly alleviate the adverse health effects of unemployment among men.