Recession Report January 2010 – unemployment and health.

Issue date
07 Jan 2010

Recession Report: Part One

Headline statistics

The latest labour market figures cover the period August to October 2009, and show that:

  • 2,491,000 people were unemployed by the ILO measure. This is:
  • - up 30,000 since last month's release (which covered July - September);
  • - up 21,000 on the quarter;
  • - and up 608,000 on the year.
  • The unemployment rate is now 7.9 per cent, up 1.9 percentage points on the year but the same as the last quarter (May-July 2009).
  • The male unemployment rate is 9.1 per cent (up 2.5 points on the year) while the female rate is 6.6 per cent (up 1.2 points on the year).
  • There were 28,926,000 people in work. This is:
  • - Comparable with the previous month's release (a drop of 1,000 - within the statistical margin of error)
  • - an increase of 53,000 on the quarter;
  • - and a drop of 432,000 on the year.
  • The quarterly increase is a result of 74,000 more women moving into work, as male employment fell by 22,000 on the quarter.
  • The working age (16-59 for women and 16-64 for men) employment rate was 72.5 per cent, down 1.7 points on the year but the same as last month's release and as the previous quarter.
  • The male employment rate was 75.5 per cent, down 0.3 points on the quarter and 2.5 points on the year. The female rate was 69.2 per cent, up 0.3 points on the quarter but down 0.8 points on the year.
  • 7,990,000 people of working age are economically inactive, of whom 2,214,000 are students and 2,235,000 are looking after their home or family.
  • 3,340,000 men and 4,649,000 women are economically inactive. This is:
  • - 7,000 less than the previous month's release;
  • - the same as the last quarter (a statistically insignificant fall of 1,000);
  • - and 96,000 more than the same point last year (however, this is an increase that results from a 195,000 annual rise in the number of students who are economically inactive, and from annual reductions in many other categories including the numbers of people who are long-term sick (-38,000) and those who are looking after a home/family (-25,000) ).
  • These figures contain a clear gender split, with an annual increase of 110,000 in male inactivity, compared with a fall of 13,000 in female inactivity levels. This is because there are more men who are economically inactive because they are students (113,000 more on the year compared to 81,000 more women) and there have been smaller decreases in other categories of economic inactivity for men than for women (for example, there has been an annual reduction of 32,000 in the number of women looking after a home/family, compared to an increase of 7,000 in the number of men in this position).
  • The working age economic inactivity rate is 21 per cent, down 0.1 points on last month's release and on the previous quarter and up 0.2 points on the year.

Claimant count estimates are for November. The latest claimant count data showed a small fall of 6,300, leaving the total number of people claiming Jobseekers Allowance at 1,626,200 (an annual increase of 534,7000). This is a consequence of a fall in fall in in-flows (new claimants) and an increase in off-flows (people moving off the benefit).

The figures also demonstrate an ongoing fall in short-term unemployment, with a reduction of 20,900 in the number of claimants on JSA for up to 6 months, and a slight reduction of 1,400 in the number claiming for between 6-12 months. In contrast there was an increase of 15,600 in the number of people claiming for over 12 months, who now comprise 12.1 per cent of all claimants.

Full and part-time work

While the employment figures showed a surprising increase in the number of people in work, the number of people in full-time jobs continued to fall, with a drop of 69,000 on the quarter, and 641,000 on the year. The quarterly fall in full-time employment was greater for women (48,000) than for men (21,000 on the quarter), but the annual fall has been far greater for men (415,000) than women (226,000). While continued falls in full-time work are of concern, the speed at which employment levels are falling does appear to be starting to slow - in contrast to the most recent release between the first and second quarters of 2009 the number of full-time jobs fell by 293,000.

The numbers in part-time work saw a sharp quarterly increase of 122,000. This was entirely due to an increase in women working part-time, as the number of men in part-time jobs was the same as the previous quarter. Since the first quarter of 2008 the number of workers in full-time employment has fallen by 736,000, while the number in part-time jobs has increased by 171,000. The following chart shows annual change in levels of part-time and full-time employment:

Annual change in levels of part-time and full-time employment, Q2 1993 - Q3 2009

graph


It shows that while there has been a sharp drop in full-time positions, levels of part-time employment have continued to show annual increases during the recession.

Unsurprisingly, the proportions of part-time workers who would rather be in permanent work have also increased, with 13.3 per cent of part-time workers now saying that they can't find a full-time job, a 3.4 point increase on the year. This is now the case for 24 per cent of part-time men (the highest since Jan 1998), and 10 per cent of part-time women (the highest rate since Dec 1996).

The proportion of temporary workers who could not find permanent jobs is also continuing to rise, with 32.2 per cent of temporary workers now in this position, an annual increase of 6.9 points (8.5 points for men and 5.5 points for women). This is the highest rate since January 2000.

Discouraged workers

While inactivity levels have seen relatively small increases since the recession started, and these are mainly due to large rises in the numbers of students and reductions in many other categories of economic inactivity, the numbers of inactive people who say that they want a job but are discouraged from jobseeking as they can't find a position, is rising. On the quarter there was an 11,000 increase in the number of people in this position, and a 30,000 increase on the year. There are currently 73,000 workers in this position, the highest level since February 1999.

While this group only comprise 0.9 per cent of inactive people, the overall proportion of people who are inactive but want a job is also increasing (these people may want to work but not qualify as unemployed by the ILO definition, which requires people to be available for and actively seeking work), by 75,000 on the quarter. 2,260,000 inactive people are now in this position - 28 per cent of the entire economically inactive population (30 per cent of inactive men and 27 per cent of inactive women), and 39 per cent of inactive people who are not students.

Long-term unemployment

Long-term unemployment is rightly becoming an increasing policy focus. While increases in overall levels of unemployment are slowing, and short-term unemployment is starting to fall, levels of long-term unemployment are still rising fast. The following table shows how levels of unemployment of less than 6 months, and levels of unemployment of over 12 months, changed for different age groups of unemployed people between the second and third quarters of 2009.

Change in unemployment levels by age group, Q2-Q3 2009 (000s)

Quarterly change in unemp. of less than 6 months

% change

Quarterly change in unemp. of over 12 months

% change

16-17

-13

-9%

4

18%

18-24

-14

-3%

26

18%

25-49

-51

-8%

38

14%

50+

-21

-11%

3

3%

The proportion of unemployed people in each age group who are long-term unemployed is therefore rising. This can be seen in the following chart.

Proportion of unemployed people who have been unemployed for over 12 months by age, Q2 1992 - Q2 2009[1]

graph


The numbers of people unemployed for over 12 months have actually been rising steadily for several years. The following chart shows howincidence of long-term unemployment by age has changed since 1992. It shows both a dramatic fall in levels of long-term unemployment for the 25-49 year old age group in the years up to 2005, and then a fairly constant increase in long-term unemployment for this age group.

Levels of unemployment of over 12 months by age, Q2 1992 - Q2 2009[2]

graph


Levels of long-term unemployment among 18-24 year olds have been rising for a similar period of time. While the over 50s and 16-17 year olds have seen increased levels, these rises have not yet been as sharp as for other age groups.
Economic forecasts

The PBR[3], published in late November, contained the Treasury's first estimates of when claimant unemployment may start to fall. These projections suggest that claimant unemployment will peak around the middle of 2010, at about 1.75 million, before falling back to around 1.5 million by the end of 2012. The Treasury analysis also showed that for every 1 per cent decline in output in the 1990s recession, employment fell by1.3 per cent, yet in the current recession, for every 1 per cent decline in output, employment has fallen by just a third of a per cent.

It is certainly true that to date the labour market has been affected less than we anticipated, and that Government investment in the economy and in tackling unemployment will have played an important role in this story. However, as we have discussed above, there are also many sources of underlying labour market weakness, and future prospects remain very far from certain.

While working time flexibility has played an important role in limiting increases in unemployment (as has been the case across most of Europe) large falls in output, compared to smaller falls in the size of the workforce, mean that worker productivity has fallen significantly. There is therefore a real risk of another wave of redundancies as companies find that weak future demand forces them to lay off more staff to remain profitable. Further rises in unemployment are therefore possible once the recovery comes, and the risks of a jobless recovery remain significant.

The likelihood of slow economic growth once the recovery starts supports this hypothesis. The average of independent forecasts for December is for the economy to grow by 1.4 per cent in 2010. However, the range among independent forecasters is large, with the lowest predicting that the economy will shrink by 0.5 per cent, and the highest predicting growth of 2 per cent. The NIESR[4] recently concluded that Britain's experience of recession has been worse than the average of advanced countries (although not as bad as some comparable countries including Germany and Japan). Considering output data, their analysis finds that across the OECD output fell by an average of 4 points between the first quarter of 2008 and the same period in 2009. In the UK output fell by 5 points over this period.

NIESR also note that the prospects for future demand remain weak and that the UK is likely to experience output of around 4-5 percent less than would have been the case had pre-recessionary conditions been maintained. In this context, future labour market weakness remains likely.

Recession Report: Part Two

The Health Impact of Unemployment
Introduction

In this month's Recession Report we take a look at the impact of unemployment on physical and mental health.[5] We concentrate on the impact on unemployed people and their families, but few will be surprised to learn that unemployment makes life more insecure and stressful for all workers, including those still in employment.

A developing story

The links between unemployment and health have been studied for a long time. In 1937 a correlation between unemployment and maternal and infant mortality was identified[6] and in 1940 a link was established between unemployment and deaths from rheumatic heart disease.[7]

By the 1980s a considerable body of evidence had emerged. A literature review carried out for the World Health Organisation concluded that 'it is almost certain that unemployment damages mental health and probable that it damages physical health.'[8]

In March 1991, Richard Smith, the then executive editor of the British Medical Journal, greeted that decade's recession with a famous editorial: 'Unemployment: here we go again.' He claimed the 'the evidence that unemployment kills - particularly the middle aged - now verges on the irrefutable.' He pointed to a study of a redundancy in Wiltshire meat products factory that found that redundancy increased consultancy rates by 20 per cent and outpatient hospital visits by 60 per cent. In a follow-up study, 'the unemployed men consulted general practitioners 57% more about 13% more illnesses, were referred to hospital outpatient departments 63% more often and visited hospital twice as often.'[9]

In March 2009, the British Medical Journal continued the tradition of hard-hitting editorials on this subject. Prof Danny Dorling asked what would bethe probable impact of rising unemployment on health. The editorial noted research showing the links between suicide and unemployment (looked at in more detail below) and that unemployment 'increases rates of depression, particularly in the young'. Dorling quoted research looking at men who had been continuously employed for at least five years in the late 1970s which found that mortality doubled in the five years after redundancy for those aged 40 - 59 in 1980.[10]

A 2009 article in The Lancet reported a study of changes in mortality and employment in 26 EU countries between 1970 and 2007. Overall, the study found that every one percent increase in unemployment was associated with:[11]

  • A 0.79 per cent increase in suicides amongst those under 65;
  • A 0.79 per cent increase in homicides
  • Every US$10 per person spent on active labour market policies reduced the effect of unemployment on suicides by 0.038 per cent.

Journalists and politicians discussing social security often claim it is 'suspicious' that the numbers claiming sickness benefits rises when unemployment goes up. But there is a link between unemployment and 'limiting illness' (illness that limits the ability to carry out work.) A study using the British Household Panel Survey (BHPS) found that 'unemployment was associated with over twice the hazard of limiting illness in the following year compared with those in employment.' Unemployment was also associated with a lower likelihood of recovering from limiting illness for men but not for women.[12]

Unemployment and physical health

Unemployment raises mortality rates through two causes of death: suicide (more on this below) and cardiovascular disease.

A Canadian literature review[13] of 46 studies in the 1980s and 90s found positive associations between unemployment and death due to heart disease in studies in Australia, Canada, Denmark, Finland, England and Wales, France, Germany, Scotland, Sweden and the USA that continued after controlling for consumption of alcohol, tobacco and dietary fat. Some studies had found that cardiovascular conditions that may contribute to ischaemic disease, such as high blood pressure and elevated cholesterol and triglycerides were also associated with unemployment. The study also suggested possible mechanisms for these associations:

  • Unemployment disrupts community and personal social relationships,
  • Leads to greater risk behaviour (such as alcohol consumption or poor diet),
  • Causes stress, and
  • Precipitates a bereavement reaction.

An Australian literature review came to similar conclusions and highlighted the importance of a number of studies of factory closures, which were able to compare the health of the workers before and after redundancy, and which pointed to increased levels of cardiovascular disease and cardiovascular disease risk factors such as high blood pressure and cholesterol levels. The author concluded that, 'despite occasional studies finding no association between unemployment and ill-health, the balance of evidence suggests that unemployment, at least among adult men, has an association with physical health, and in particular with cardiovascular disease.'[14]

A large American survey of self-reported hypertension (high blood pressure) revealed that 'people who reported having been unemployed for a year or more had a higher estimated risk of hypertension than those who reported having been unemployed less than a year. Unemployed men with less than a high school education had the highest risk of hypertension ... but men who had graduated from high school and been unemployed for a year or more still had an increased risk ... Women who had been unemployed for a year or more and had less than a high school education had an increased risk of hypertension.'[15]

Another American survey, the Alameda County Study, was used to look at people who had been free of hypertension in 1974 but in 1994 reported having used antihypertensive medication. Both the threat and the reality of unemployment 'increase the likelihood of developing hypertension, especially among men'. For men, unemployment more than doubled the risk of developing high blood pressure, but for women being in low status work, psychological distress and social alienation were more important factors.[16]

Unemployment and psychological health

Research[17] for the Social Exclusion Task Force has shown that people who lost their job were twice as likely to have short-term depression as those who remained in work; this was true for 1991, 2001 and 2008:

Job loss and short-term depression

Proportion suffering short-term depression

Lost job

Remained in work

1991

37%

16%

2001

36%

18%

2008

39%

18%

People who become unemployed are more likely to experience outcomes which are very stressful and which may make mental ill-health more likely, such as debt or problems with relationships. Unemployment can also trigger problems with alcohol and other substances that may make matters worse. The Social Exclusion Task Force evidence includes research that shows problems in all these areas:[18]

  • Unemployment increases the risk of marital dissolution by 70%.
  • Relate has carried out research which found that 25% of families report more arguments due to money problems caused by the recession.
  • The NatCen research for the Social Exclusion Task Force found that people who lost their jobs in 1991 and late 2008 were 4 to 6 times more likely to find it 'quite' or 'very' difficult to manage financially than those who remained in employment.[19]
  • In the 3 months to the end of June 2009, Citizens' Advice Bureaux were dealing with 9,300 new debt enquiries every day.
  • Studies in a number of countries have shown that losing one's job can trigger problem drinking for 1 in 5 men and 2 in 5 women.

The strongest evidence concerns suicide. In an important 1985 survey of the literature, Stephen Platt showed that unemployment was correlated with an increased risk of successful suicide.[20] The following year he showed that the same relationship exists for attempted suicide.[21] A more recent study, carried out in New Zealand, found that unemployed people are two to three times as likely to commit suicide as people in employment, though about half the correlation may be explained by mental illness.[22]

According to the British Psychological Society's Working Group on Psychological Health and Well-Being, prolonged unemployment 'is linked to worsening mental and physical health, including an increased risk of suicide and premature death.'[23] The Samaritans have described emotional health issues as the 'hidden face' of the recession and at the end of 2008 warned that 'the deepening financial and economic crises could lead to an increase in suicide rates nationwide as people face unemployment, mounting debt and housing insecurity.'[24] The Samaritans-YouGov Worries 2009 survey showed that 48 per cent of UK adults had worried about money/debt and 24 per cent about job security or redundancy.[25]

Evidence has also been building up about the impact of unemployment on the health of family members other than the unemployed person. A 2001 study of more than 10,000 Scandinavian children found that children in families with no parent employed in the previous 6 months had a higher prevalence of ill health and lower well-being than other children.[26]

The evidence of a link between unemployment and suicide is particularly strong and this section looks at it in some detail, but that is not the only harmful psychological impact of unemployment.

A study using data from the BHPS showed that unemployed people had higher rates of minor psychiatric morbidity than employed and economically inactive people. Even more interesting was the discovery that, for those who were unemployed, there was a 'reverse' gradient, with the impact of unemployment on minor psychiatric morbidity being higher for those who had previously had a higher social position.[27] A similar relationship exists for frequent mental distress (having 14 or more 'mentally unhealthy days' in the previous 30) - an American study using data for 98,000 men and women aged 25 - 64 found that those who were unemployed were twice as likely as other people to experience frequent mental distress.[28]

Conclusion

There are clear and concerning links between unemployment and poor physical and mental health, and the extensive evidence base demonstrates the importance of ensuring that the Government has a proactive strategy to prevent widespread long-term unemployment taking hold. Such an approach will be vital to protecting individuals and families, and to limiting future social and economic costs.

Notes


[1] Data are not available for 16-17 year olds for the following dates: 1992 Q2; 1998 Q1, Q3 and Q4; 1999 Q3; 2001 Q2, Q3 and Q4; 2004 Q4. This is likely to be due to small sample sizes in the Labour Force Survey. To allow the available data to be graphed unemployment rates for these periods have been assumed to be constant with the rates for the previous quarter for which data are available.

[2] As above, regarding data for 16-17 year olds.

[3] HMT (2009) Pre-Budget Report 2009 London: HMT available at http://www.hm-treasury.gov.uk/d/pbr09_completereport.pdf.

[4] Weale M (2009) Commentary: International Recession and Recovery, National Institute Economic Review, No. 209, July 2009.

[5] Unless otherwise indicated, the source for data in this half of the report is an excellent new 'evidence pack' from the Cabinet Office's Social Exclusion Task Force. Learning from the Past: Working together to tackle the social consequences of the recession is available on the web, at http://www.cabinetoffice.gov.uk/media/319296/lftp-evidence-pack.pdf

[6] Unemployment and Health, H Singer, quoted in 'An Introduction to Unemployment and Health', R Smith, British Medical Journal, 12.10.85, pp 1024 - 7.

[7] Medical Officer, R Titmuss & J Morris, 1940, quoted in 'An Introduction to Unemployment and Health', R Smith, British Medical Journal, 12.10.85, pp 1024 - 7.

[8] 'Recession and Health - a literature review', S. Watkin, in Health Policy Implications of Unemployment, World Health Organisation, 1985.

[9] 'Unemployment: here we go again', R Smith, British Medical Journal, vol. 302, 16 March 1991, pp 606 - 7.

[10] 'Unemployment and Health', Daniel Dorling, British Medical Journal, 2009; 338: b829.

[11] 'The public health effect of economic crises and alternative policy responses in Europe: an empirical analysis', D Stuckler, S Basu, M Suhrcke, A Coutts & M McKee, The Lancet online,July 8, 2009, http://press.thelancet.com/crises.pdf

[12] 'Employment status, employment conditions, and limiting illness: prospective evidence from the British household panel survey 1991-2001' M Bartley, A Sacker & P Clarke, J Epidemiol Community Health 2004; 58: 501-506.

[13] 'The Impact of Unemployment on Health: A Review of the Evidence', R Jin, C Shah & T Svaboda, Journal of the Canadian Medical Association, 153:5: 529-540, 1995.

[14] 'The health consequences of unemployment: the evidence', C Mathers & D Schofield, Medical Journal of Australia, 1998; 168: 178-182.

[15] 'Self reported hypertension among unemployed people in the United States', R Brackbill, P Siegel & S Ackermann, British Medical Journal 4 March 1995; 310: 568.

[16] 'Psychosocial Predictors of Hypertension in Men and Women', S Levenstein, M Smith & G Kaplan, Archives of Internal Medicine, 2001; 161: 1341 - 6.

[17] Taken from Social impacts of recession: The impact of job loss and job insecurity on social disadvantage M Barnes, A Mansour, W Tomaszewski (NatCen) and P Oroyemi (Cabinet Office), Social Exclusion Task Force, 2009, table 3.1. Available on the web, at http://www.cabinetoffice.gov.uk/media/319351/natcen-social-impacts.pdf

[18] Learning from the Past: Working together to tackle the social consequences of the recession, Social Exclusion Task Force, 2009, p 3.

[19] Social impacts of recession: The impact of job loss and job insecurity on social disadvantage M Barnes, A Mansour, W Tomaszewski (NatCen) and P Oroyemi (Cabinet Office), Social Exclusion Task Force, 2009, section 3.2.

[20] 'Unemployment and suicidal behaviour', S Platt,Social Science Medicine, 1984; 19:93-115.

[21] 'Parasuicide and unemployment', S Platt, Br J Psychiatry 1986; 149: 401-5.

[22] 'Unemployment and suicide. Evidence for a causal association?', T A Blakely, S C D Collings & J Atkinson, J Epidemiol Community Health 2003; 57: 594-600.

[23] Psychological health and well-being: A new ethos and a new service structure for mental health, Peter Kinderman & Sara Tai (ed.s) Working Group on Psychological Health and Well-Being, BPS, 2008, downloadable from http://www.bps.org.uk/downloadfile.cfm?file_uuid=B2EBE192-1143-DFD0-7EFE-BD378F2B2983&ext=pdf

[24] 'Samaritans fear suicide increase due to economic crisis', Samaritans Press Release, 18th December 2008, available at http://www.samaritans.org/media_centre/latest_press_releases/samaritans_suicide_crisis.aspx

[25] Op cit, available at http://www.samaritans.org/pdf/WorriesSurveyUK-databreakdownFINAL141209.pdf

[26] 'Parents' labour market participation as a predictor of children's health and wellbeing: a comparative study in five Nordic countries', C Reinhardt Pedersen & M Madsen, J Epidemiol Community Health 2002; 56: 861-867.

[27] 'Social position and minor psychiatric morbidity over time in the British Household Panel Survey 1991-1998', R D Wiggins, P Schofield, A Sacker, J Head & M Bartley, J Epidemiol Community Health 2004; 58: 779-787.

[28] 'Associations Between Short- and Long-Term Unemployment and Frequent Mental Distress Among a National Sample of Men and Women', D Brown, L Balluz, E Ford, W Giles, T Strine, D Moriarty, J Croft & A Mokdad, Journal of Occupational and Environmental Medicine, November 2003, pp 1159-1166.