The Potential Role of Unemployment Benefits in Shaping the Mental Health Impact of Unemployment

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Abstract
This study looks at the association between formal systems of support (unemployment compensation or welfare) and mental health outcomes during periods of unemployment. It assesses whether unemployed persons not receiving unemployment benefits are at greater risk of reporting depression and suffering ill-health than those receiving some kind of unemployment compensation, independent of total household income. The authors performed a secondary analysis of data collected in the National Survey of Families and Households, 1987–1988. Outcome measures included an index of depression and perception of health status. Multiple regression analyses were used. The unemployed receiving unemployment compensation or benefits from other entitlement programs did not report significantly higher depression relative to the employed. Rather, the study found a significantly higher index of depression among unemployed persons receiving welfare benefits or no benefits, even after controlling for total household income and previous employment/unemployment history. Thus unemployment compensation may play an important role in ameliorating the impact of unemployment on depression. By contrast, means-tested benefits may not be sufficient to reduce the risk for reporting depression and suffering ill-health in comparison with the full-time employed. The implications of the findings are discussed in terms of social policy development.

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