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Do employment protection policies reduce the relative disadvantage in the labour market experienced by unhealthy people? A natural experiment created by the Great Recession in Europe

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  • Reeves, Aaron
  • Karanikolos, Marina
  • Mackenbach, Johan
  • McKee, Martin
  • Stuckler, David

Abstract

Unhealthy persons are more likely to lose their jobs than those who are healthy but whether this is affected by recession is unclear. We asked how healthy and unhealthy persons fared in labour markets during Europe's 2008–2010 recessions and whether national differences in employment protection helped mitigate any relative disadvantage experienced by those in poor health. Two retrospective cohorts of persons employed at baseline were constructed from the European Statistics of Income and Living Conditions in 26 EU countries. The first comprised individuals followed between 2006 and 2008, n = 46,085 (pre-recession) and the second between 2008 and 2010, n = 85,786 (during recession). We used multi-level (individual- and country-fixed effects) logistic regression models to assess the relationship (overall and disaggregated by gender) between recessions, unemployment, and health status, as well as any modifying effect of OECD employment protection indices measuring the strength of policies against dismissal and redundancy. Those with chronic illnesses and health limitations were disproportionately affected by the recession, respectively with a 1.5- and 2.5-fold greater risk of unemployment than healthy people during 2008–2010. During severe recessions (>7% fall in GDP), employment protections did not mitigate the risk of job loss (OR = 1.06, 95% CI: 0.94–1.21). However, in countries experiencing milder recessions (<7% fall in GDP), each additional unit of employment protection reduced job loss risk (OR = 0.72, 95% CI: 0.58–0.90). Before the recession, women with severe health limitations especially benefited, with additional reductions of 22% for each unit of employment protection (AORfemale = 0.78, 95% CI: 0.62–0.97), such that at high levels the difference in the risk of job loss between healthy and unhealthy women disappeared. Employment protection policies may counteract labour market inequalities between healthy and unhealthy people, but additional programmes are likely needed to protect vulnerable groups during severe recessions.

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  • Reeves, Aaron & Karanikolos, Marina & Mackenbach, Johan & McKee, Martin & Stuckler, David, 2014. "Do employment protection policies reduce the relative disadvantage in the labour market experienced by unhealthy people? A natural experiment created by the Great Recession in Europe," Social Science & Medicine, Elsevier, vol. 121(C), pages 98-108.
    • Handle: RePEc:eee:socmed:v:121:y:2014:i:c:p:98-108
    DOI: 10.1016/j.socscimed.2014.09.034
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    5. Miller, Michael & Toffolutti, Veronica & Reeves, Aaron, 2018. "The enduring influence of institutions on universal health coverage: An empirical investigation of 62 former colonies," World Development, Elsevier, vol. 111(C), pages 270-287.
    6. Asya Bellia, 2021. "How do different policy combinations affect the labour market attachment of disabled individuals? A review of the literatur," Discussion Papers 2021/283, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    7. Daniel Holman & Alan Walker, 2018. "Social Quality and Health: Examining Individual and Neighbourhood Contextual Effects Using a Multilevel Modelling Approach," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 138(1), pages 245-270, July.
    8. Mussida, Chiara & Sciulli, Dario, 2023. "The evolution of income distribution and disability in Europe," Structural Change and Economic Dynamics, Elsevier, vol. 66(C), pages 29-38.
    9. Anastasia Vlachou & Panayiota Stavroussi & Olga Roka & Evdokia Vasilou & Dimitra Papadimitriou & Chiara Scaratti & Asel Kadyrbaeva & Klemens Fheodoroff & Valentina Brecelj & Olga Svestkova & Beata Tob, 2018. "Policy Guidelines for Effective Inclusion and Reintegration of People with Chronic Diseases in the Workplace: National and European Perspectives," IJERPH, MDPI, vol. 15(3), pages 1-19, March.
    10. Tøge, Anne Grete & Blekesaune, Morten, 2015. "Unemployment transitions and self-rated health in Europe: A longitudinal analysis of EU-SILC from 2008 to 2011," Social Science & Medicine, Elsevier, vol. 143(C), pages 171-178.
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    12. Simonetti, Irene & Belloni, Michele & Farina, Elena & Zantomio, Francesca, 2022. "Labour market institutions and long term adjustments to health shocks: Evidence from Italian administrative records," Labour Economics, Elsevier, vol. 79(C).

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