Receiving Unemployment Benefits May Have Positive Effects On The Health Of The Unemployed

Research suggests that job loss can cause illness and premature death. This raises the question of whether unemployment benefit programs, which are intended to alleviate the financial stress of job loss, can protect the health of the unemployed. To investigate this question, we analyzed data for the period 1984-2009 from the Panel Study of Income Dynamics. We found that receiving unemployment benefits significantly reduced the probability of reporting poor health in the year after job loss, by around 5 percentage points. The health-promoting effects of receiving the benefits were robust across multiple model specifications and after we accounted for preexisting differences between benefit recipients and nonrecipients. Our results add to the growing body of literature that suggests that social policies can have unanticipated health effects.