The effect of unemployment benefits on health: A propensity score analysis

In the wake of the Great Recession, an expanding body of research has highlighted the role of social protection policies in mitigating the deleterious effects of adverse socioeconomic experiences. In this paper, we examine whether unemployment benefits – a key pillar of national social protection systems – can offset the negative health consequences of unemployment. Using cross-sectional nationally representative data from the Canadian Community Health Survey covering the period between 2009 and 2014, we employed propensity score matching to estimate the effect of receiving unemployment benefits on self-rated health among the unemployed. After matching benefit recipients to comparable non-recipient ‘controls’, we found that receiving unemployment benefits was associated with better health outcomes. In our main analyses, benefit recipiency reduced the probability of reporting poor self-rated health among the unemployed by up to 4.9% (95% CI −7.3, −2.5). Sensitivity analyses stratified by socioeconomic position revealed stronger treatment effects among lower income and less educated individuals. By contrast, treatment effects were small or negligible among higher income and more educated individuals. Our findings provide evidence that unemployment benefits can play an important role in offsetting the negative health consequences of unemployment among the socioeconomically disadvantaged. These findings lend support to recent calls, including many from within the field of public health, for governments to respond to current labor market trends by expanding the generosity and scope of social protection policies.