Short-Run Effects of Job Loss on Health Conditions, Health Insurance, and Health Care Utilization

Jessamyn Schaller, University of Arizona
Ann H. Stevens, University of California, Davis

Job loss in the U.S. is associated with long-term reductions in income and increases in mortality rates. This paper examines the short-run changes in health, health care access, and health care utilization after job loss that lead to these long-term effects. We show that job loss results in worse self-reported health, including mental health, but is not associated with increases in chronic conditions. Among the full sample, we see reductions in insurance coverage, but little evidence of reductions in health care utilization. Among displaced workers for whom the lost job was their primary source of insurance we do see reductions in doctor’s visits and prescription drug usage. These results suggest that access to insurance and care may be an important part of the health effects of job loss. The pattern of results is also consistent with a significant role for stress in generating long-term health consequences after job loss.a