University of Cambridge, Centre for Business Research Working Paper Series
July 15, 2020
The unprecedented shock to the UK economy inflicted by government measures to contain the Coronavirus (COVID-19) risked plunging millions of workers into unemployment as businesses were forced to close or scale back activity. To avoid that cliff edge, and the predictable damage to both workers mental health and to the viability of the closed down businesses, the government also introduced the Coronavirus Job Retention Scheme (CJRS) that allowed for the furloughing of workers. Even so the number of people claiming benefits as unemployed has soared above two million for the first time since 1996 and others have been working significantly reduced working hours. The first and second waves of Understanding Society COVID-19 Study provide an early opportunity to examine how far these changes in employment status, work hours and involvement in furlough job retention scheme are related to the likelihood of having mental health problems, measured by 12-item General Health Questionnaire. Our findings confirm that leaving paid work is significantly related to poorer mental health, even after controlling for the household income and other factors. In contrast having some paid work and/or some continued connection to a job is better for mental health than not having any work at all. Those who remain part-time employed before and during the COVID-19, those who are involved in furlough job retention scheme or transition from full-time to part-time employment are all found to have similar levels of mental health as those who continued to work full-time. Results also show that overall women’s mental health has deteriorated much more than men’s when compared to Wave 9 (2017-2019) of Understanding Society.
Both short working hours and furlough job retention schemes can thus be seen to be effective protective factors against worsening mental health. However, the key issue is now how to move beyond the furlough scheme. A v-shaped bounce back is not on the horizon and many sectors will at most move into partial activity. So, the need to avoid a huge further leap in unemployment is just as vital with all the risk to mental health that that would entail. These findings point to the need to move towards sharing work around more equitably, including introducing a shorter working week for all (except in those sectors under extreme pressure) in order to minimize the risk to mental health and wellbeing if those on furlough are now pushed into unemployment.
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