The Effect of Extended Unemployment Insurance Generosity on Population Mental Health

Jie Chen, Xiaohui Guo, Lizhong Peng and Mengcen Qian

American Journal of Health Economics, 2023, vol. 9, issue 2, 148 - 174

Abstract: This study contributes to a small but growing literature on the health effects of unemployment insurance (UI) by examining the impact of extended benefit generosity during the Great Recession on population mental health. Using data from the 2003–13 Behavioral Risk Factor Surveillance System as well as cross-state and time series variation in UI policies, we estimate that a one standard deviation (or $1,000) increase in UI generosity is associated with a 5.1 (0.5) percent improvement in self-reported mental health among the unemployed. We also provide evidence for the validity of our research design through an event study model and supplementary regressions that incorporate county or county-by-time fixed effects. However, we find no definitive evidence that UI affects general/physical health, health insurance, access to care, or health behaviors.

Date: 2023
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