Insights on unemployment, unemployment insurance, and mental health

https://doi.org/10.1016/j.jhealeco.2011.01.006Get rights and content

Abstract

This paper contributes to the growing literature on the relationship between business cycles and mental health. It is one of the first applications in the economics literature to incorporate data on web searches from Google Insights for Search, and these unique data allow the opportunity to estimate the association between weekly unemployment insurance (UI) claims, in addition to monthly unemployment rates, and search indexes for “depression” and “anxiety”. Results from state fixed effects models yield (1) a positive relationship between the unemployment rate and the depression search index and (2) a negative relationship between initial UI claims on the one hand and the depression and anxiety search indexes on the other. A lag analysis also shows that an extended period of higher levels of continued UI claims is associated with a higher depression search index.

Introduction

This paper adds to the growing literature on the relationship between business cycles and health. Previous studies have focused on the relationship between unemployment levels and a range of health outcomes including both mortality and morbidity (see Ruhm, 2005 for example). Recent business cycle changes and the availability of new data offer two advantages that are leveraged here. First, the “Great Recession” of 20071,2 is widely believed to be the worst recession in the U.S. since the Great Depression, notably with an extended duration of high levels of unemployment. Insofar as this recession is different from those previously studied it is important to measure its potentially unique effects on population health.

Second, data that have recently been made available by Google through the product Google Insights for Search3 (GI) allow a unique view on how people may respond to business cycles regarding their health. These data allow for the comparison of an index of Google searches within U.S. states and by week for specific search terms. This paper explores the relationship between unemployment and unemployment insurance (UI) claims and Google searches for “depression” and “anxiety”. To flesh out the relationship, evidence is presented suggesting that these searches are meaningful representations of the intent to understand or seek treatment for symptoms of psychological distress that are experienced at the time of search. Broadly speaking, the results suggest that unemployment and continued UI claims are positively associated with searches for depression while initial UI claims are negatively associated with searches for depression and anxiety (with a more negative association in states with more generous unemployment insurance benefits).

There are several contributions to the literature made by this paper. It is one of the first to simultaneously examine the effects of unemployment and UI on measures related to psychological distress. It is also one of the first to introduce GI in the economics literature, which in this case allows for a precise analysis of weekly reported UI claims. Finally, it adds to the large but growing literature on the relationship between macroeconomic conditions and mental health.

The paper proceeds as follows. First, I describe previous literature that (a) explores the relationship between business cycles and mental health and (b) introduces the GI data. Next, I outline the empirical framework and provide a detailed data description. Results on the relationship between unemployment, UI, and searches are presented including robustness checks, a lag analysis, timing effects of UI receipt, and pre- and post-recession effects. In the last section I conclude.

Section snippets

Background

A large number of studies have examined the relationship between aggregate economic conditions and health, with a focus on unemployment. In a series of papers using similar empirical strategies to that employed here, Ruhm (2000) finds that aggregate mortality is procyclical but mortality from suicide is not, suggesting a worsening of psychological distress during economic downturns. Ruhm (2003) finds that an increase in the unemployment rate has a positive association with the self-reported

Data

The primary outcomes of interest are indexes of Google searches for the terms “depression” and “anxiety” exported from the “health” category of the GI online tool.4

Empirical framework

The empirical model used to estimate the effects of unemployment and UI on the depression and anxiety search indexes isSearchIndexitw=αi+Unemplitmβ+UnemplInsitwγ+Xitmφ+δt+λw+εitwwhere SearchIndex is the normalized GI index for depression or anxiety searches in a given state i, year t, and week w; Unempl is the state unemployment rate in year t and month m; UnemplIns is a vector of state UI measures in year t and week w; and X is a vector of other state level characteristics in year t and month m

Main results

Two issues regarding identification are worth noting here. First, like previous studies on the health effects of macroeconomic conditions, it is important to not commit the “ecological fallacy”12 by assuming that aggregate unemployment effects will translate into the same effects at the individual level. The results must be viewed neither as necessarily causal nor as adhering to any particular unobserved mechanism.

Conclusion

There has recently been extraordinary legislative activity with respect to UI and it is unclear what further action may be taken. Legislation enacted since July 2008 has repeatedly extended the federal unemployment benefit duration20 to its current level of 99 weeks, but with the expiration of benefits for a large number of workers at the end of 2010 there has been discussion in the media and among lawmakers about the possibility of

Acknowledgements

The author thanks Michael Murray, Daniel Riera-Crichton, the editor, and reviewers for helpful comments. The author takes full responsibility for every error.

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