An instrumental variable approach to unemployment, psychological health and social norm effects.

Abstract:

:This empirical study presents estimates of the impact of unemployment on psychological health using U.K. household panel data. The causal impact of unemployment is established using instrumental variable methods. Psychological health is measured using both the General Household Questionnaire measure and also self-reported data on individual occurrences of anxiety-related conditions. We find evidence for positive selection into unemployment on the basis of poor psychological health. Nevertheless, panel instrumental variable estimates suggest a sizeable causal worsening of psychological health arising from unemployment. We also find evidence that the negative impact of unemployment can be largely mitigated by local labour market conditions: those entering unemployment in localities with higher unemployment rates suffer less deterioration in their psychological health.

journal_name

Health Econ

journal_title

Health economics

authors

Gathergood J

doi

10.1002/hec.2831

subject

Has Abstract

pub_date

2013-06-01 00:00:00

pages

643-54

issue

6

eissn

1057-9230

issn

1099-1050

journal_volume

22

pub_type

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