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Journal Article

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

Authors

Publication date

Jun 2013

Summary

This empirical study presents estimates of the impact of unemployment on psychological health using UK 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.

Published in

Health Economics

Volume and page numbers

22 , 643 -654

DOI

http://dx.doi.org/10.1002/hec.2831

ISSN

16

Subjects

Unemployment, Well Being, and Health

Notes

Not held in Res Lib - bibliographic reference only

#520739


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