The Impact of the Pandemic on Health-Related Inactivity and Benefit Claims

Jonathan Portes (), Riika Savolainen () and Dimitris Vallis ()
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Jonathan Portes: King's College London
Riika Savolainen: University of Swansea
Dimitris Vallis: King's College London

No 18854, IZA Discussion Papers from IZA Network @ LISER

Abstract: We analyse whether the post-pandemic rise in health-related economic inactivity and benefit receipt in the United Kingdom was disproportionately concentrated among working-age adults classified as clinically vulnerable to COVID-19. Using longitudinal data from the UK Household Longitudinal Study, linked to the Understanding Society COVID-19 Study, we treat preexisting vulnerability as a marker of differential exposure to the consequences of the pandemic. We combine coarsened exact matching with pooled pre/post and two-way fixed-effects difference-in-differences specifications. The main estimates indicate clinically vulnerable individuals were 1.3–2.1 percentage points more likely to become inactive because of long-term sickness after 2020. Relative to pre-pandemic rates, this corresponds to an increase of 20–40 per cent. Triple differences estimates are positive but imprecisely. We find no robust evidence of disproportionate increases in disability or incapacity benefit receipt. This suggests persistent relative deterioration in labour-market participation among clinically vulnerable individuals. The weaker relationship with benefit receipt suggests that institutional processes and programme design also play a major role.

Keywords: economic inactivity; health; COVID-19; disability benefits (search for similar items in EconPapers)
JEL-codes: I18 J14 J21 (search for similar items in EconPapers)
Date: 2026-08
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