Does Unemployment Really Kill?

The prior literature almost unanimously finds that unemployment has a negative effect on individuals’ mental and physical health and well-being. But if persons with a long unemployment history and an ill health are more likely to become unemployed it may cause an upward bias in the estimated effect of unemployment on health. To correct for this, I analyse the effect of unemployment on 13-year mortality using a large longitudinal dataset obtained from Danish administrative registers, including information on individuals’ initial health, unemployment history, and many other factors that may simultaneously affect the unemployment propensity and survival chances. Even after controlling for these factors, I find a positive impact of unemployment on mortality: unemployment causes a 32–37 per cent excess mortality for men in their 20’s, 30’s, and 40’s; for older men in their 50’s the impact is smaller. There is no clear impact of unemployment on women’s mortality except - with some uncertainty - for women in their 20’s.