The impact of working conditions on mental health: Novel evidence from the UK

•Working conditions significantly impact the mental health of workers in the UK.•Workers who experienced better working conditions in the early 2010s show sizable improvements in anxiety, self-confidence, concentration and social dysfunction.•The most relevant working conditions for mental health are job latitude and discretion, working schedules, work intensity, and physical environment.•The effect is concentrated among women, especially those younger than 35 and older than 50.•Improvements in working conditions are especially beneficial for workers in high strain jobs (high job demand, low job control). This paper investigates the causal impact of working conditions on mental health in the UK, combining new longitudinal data on working conditions from the European Working Conditions Survey with microdata from the UK Household Longitudinal Survey (Understanding Society). Our empirical strategy accounts for the endogenous sorting of individuals into occupations by including individual fixed effects. We address the potential endogeneity of occupational change over time by focusing only on individuals who remain in the same occupation (ISCO 3-digit), exploiting the variation in working conditions within each occupation over time. This variation, determined primarily by general macroeconomic conditions, is likely to be exogenous from the individual point of view. Our results indicate that, for female workers, improvements in working conditions such as skills and discretion, working time quality, and work intensity improve mental health outcomes such as loss of confidence, anxiety, social dysfunction, and risk of clinical depression. These effects are clinically relevant and substantial for younger and older female workers and larger for workers in occupations characterised by an inherently higher level of job strain. We detail how different dimensions of job quality impact different mental health outcomes for different age groups. Our results have important implications for public policies and firms which aim to improve workers’ wellbeing and productivity through workplace interventions focused on mental health.