Effects of unemployment insurance duration on mental and physical health

Using administrative data for Upper Austrian workers from 2003–2013, we show that a 9-week extension in unemployment insurance (UI) duration increases nonemployment length by 4 days, on average, and impacts worker physical and mental health. These effects vary by gender. Specifically, we find that female workers eligible for an additional 9 weeks of UI benefits reduce opioid and antidepressant prescriptions by 0.5 percentage points (50%) and 0.9 percentage points (11%), respectively. Moreover, we find some evidence of beneficial within-household spillovers for young children. For male workers, we find little evidence of health effects of extending UI benefit duration. We posit that these differential effects are driven by a combination of income and occupational changes that also vary by gender. •We estimate the effects of extended unemployment insurance (UI) duration on health.•We estimate causal effects by exploiting an age cutoff for UI duration in Austria.•Longer UI duration reduces antidepressant and opioid prescriptions for female workers.•Longer UI also has positive impacts on children of unemployed eligible female workers.•We estimate no health effects for male workers.