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The effect of unemployment insurance on alcohol use and abuse following job loss

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  • Lantis, Robert
  • Teahan, Brittany

Abstract

We investigate whether unemployment insurance (UI) policy affects the drinking behavior of the unemployed. Using NLSY data supplemented with Geocode data, we estimate the effect of benefit replacement rates on changes in individual alcohol consumption following job loss. Identification relies on variation in replacement rates across states and over time. Results indicate that a 100% increase in benefit replacement rate, roughly equivalent to a state moving from the lowest to the highest replacement rate, would, on average, result in unemployed individuals consuming 19.1 additional drinks a month. Looking at the change in an individual's binge drinking upon job loss, individuals receiving the highest level of benefits are 14.7% more likely to increase their binge drinking than those receiving the least generous benefits. We find that individuals’ responsiveness to changes in replacement rates vary based on drinking history, industry labor market conditions, education, and age.

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  • Lantis, Robert & Teahan, Brittany, 2018. "The effect of unemployment insurance on alcohol use and abuse following job loss," Economics & Human Biology, Elsevier, vol. 30(C), pages 92-103.
    • Handle: RePEc:eee:ehbiol:v:30:y:2018:i:c:p:92-103
    DOI: 10.1016/j.ehb.2018.06.003
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    Cited by:

    1. Wojciech Gryzbowski & Aleksandra Adamicz & Hanna Wysocki, 2021. "The Social Externality of Health Insurance: Evidence from Unemployment Insurance Generosity and Children Mortality," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 2, pages 262-279, July.
    2. Shahidi, Faraz Vahid & Muntaner, Carles & Shankardass, Ketan & Quiñonez, Carlos & Siddiqi, Arjumand, 2019. "The effect of unemployment benefits on health: A propensity score analysis," Social Science & Medicine, Elsevier, vol. 226(C), pages 198-206.
    3. Hamid Noghanibehambari & Mahmoud Salari, 2020. "Health benefits of social insurance," Health Economics, John Wiley & Sons, Ltd., vol. 29(12), pages 1813-1822, December.
    4. Jeong, Soyun & Fox, Ashley M., 2023. "Enhanced unemployment benefits, mental health, and substance use among low-income households during the COVID-19 pandemic," Social Science & Medicine, Elsevier, vol. 328(C).

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    More about this item

    Keywords

    Alcohol consumption; Job loss; Unemployment insurance;
    All these keywords.

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty

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