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Primary Submission Category: Health behaviors
The Generosity of Labor Market Institutions and Behavioral Health Outcomes
Authors: Megan Reynolds, Jaclyn Schess,
Presenting Author: Megan Reynolds*
Population behavioral health outcomes (including mental health and substance use disorders) have been worsening in the United States in recent decades, particularly amongst young- and working-age adults. The prevalence of anxiety, depression, as well as drug and alcohol use disorder have increased substantially amongst 18-25 year olds (Goodwin et al., 2020; Udupa et al., 2023; Weinberger et al., 2018). These outcomes, like many health outcomes in the United States, demonstrate a socioeconomic gradient whereby worse mental health outcomes are associated with lower socioeconomic status. While clinical treatments for mental ill-health have led to only modest improvements , growing evidence demonstrates the relationship between social, political and economic circumstances and behavioral health outcomes, highlighting a potential role for social policy in improving behavioral health. Income support policies (i.e. cash transfers, the Earned Income Tax Credit, and Supplemental Nutrition Assistance) have demonstrated consistent improvements in mental health and psychological wellbeing.
Given the strong economic gradient in behavioral health outcomes and the observed benefits of economic security policies, there is good reason to believe that labor market institutions (LMIs), including the minimum wage, labor unions and unemployment benefits, may play an important role in population behavioral health. Indeed, research shows that increased minimum wages decrease suicide rates in US adults (Dow et al., 2020) and evidence is mounting on the health effects of labor union membership (Malinowski et al., 2015) and unemployment insurance (Berkowitz & Basu, 2021).
To understand the combined economic value of LMIs, we construct a labor market institution generosity (“LMI generosity”) calculator to define the dollar value of LMIs in each state-year from 1999 to 2019. Our labor market institution generosity calculator estimates the total income from semi-annual employment and semi-annual unemployment benefits that a worker experiencing job loss might expect in a given state and year. The measure reflects minimum wage levels, union wage and health insurance premiums and unemployment insurance benefit formulas and durations. The resulting measure reflects how far labor market institutions in a given state and year lift a low-wage worker to the relative poverty line. Substantial cross-state and temporal variation allows for meaningful quasi-experimental investigation using the LMI generosity measure as exposure.
Using this novel calculator, we investigate how LMI generosity relates to behavioral health outcomes amongst adults in the United States. We merge state-year LMI generosity with the Behavioral Risk Factor Surveillance System microdata for 1999-2019. We restrict the sample to those aged 18-64 who are current working or recently employed and have less than a Bachelors degree. Our main specification uses state-year fixed effects with state-specific linear trends and rich individual and state-level controls. We also estimate a stacked event-study model, defining events as those with a change of LMI generosity of 1SD where there are two years prior without such a change.
This study utilizes the first comprehensive measure of LMI generosity across states in order to offer new evidence on how labor market institutions may serve as population-level interventions for improving behavioral health among adults in the US.