Is unemployment and low income harmful to health? Evidence from Britain

Abstract

This study investigates how unemployment and income influence the length of time an individual remains in good health. This is a complex relationship since unemployment or low income deteriorates health but poor health can become a barrier to obtaining higher income or gaining re-employment. Data are from the British Household Panel Survey, using two measures of physical health: an index of mobility problems and a measure of self-assessed health. The results show that unemployment, low income and poor education adversely affect the time that people remain in good health. These results have important implications for public policy, particularly in an age of austerity when social protection mechanisms are under threat. In fact, the results suggest that to improve health and reduce health inequality, more investment needs to be directed at policies that enhance labour force participation, improve education and reduce income inequality.

Keywords::

• unemployment
• health

Acknowledgements

The authors thank Ian McAvinchey for helpful comments.

Additional information

Funding

This work was financially supported by the European Commission under the Fifth Framework Programme “Quality of Life and Management of Living Resources” [grant number QLRT-2001-02292].

Notes on contributors

David Cooper

David Cooper is a statistical research assistant at the Health Services Research Unit at the University of Aberdeen. His main research interests are focused around economics of health and well-being.

W.D. McCausland

W.D. McCausland is Head of Economics at the University of Aberdeen. His principal research interests are in the areas of open economy macroeconomic modelling, labour economics and the economics of health and well-being. He has been involved in three large EU-funded projects, and has published widely in internationally respected peer-reviewed journals.

Ioannis Theodossiou

Ioannis Theodossiou is Professor of Economics at the University of Aberdeen. His research interests span a range of issues including wage determination, unemployment, macroeconomics, and the economics of health and well-being. He has been the principal investigator and coordinator of a number of EU-funded projects, and has a long track record of publishing in top international peer-reviewed journals.