Health-related effects of welfare-to-work policies
Introduction
Non-health related policies may have consequences for health that are equally or more important than the outcomes they were originally designed to produce. This impact may be especially important in the case of income support policies. Health outcomes and health behaviors have become important themes in the broader public discourse about welfare reform. In most OECD countries, antipoverty programs have been redesigned with the aim of achieving better results in terms of work, personal responsibility, and economic self-sufficiency. As a result, raising the employability of recipients has become a key issue. This strategy faces major challenges, as poor physical or mental health may interfere with work goals in these programs (Bjorklund, 1985; Coiro, 2008; Danziger et al., 2000; Kovess, Gysens, Poinsard, Chanoit, & Labarte, 1999; Meara & Frank, 2006).
The evidence on the other side of the issue is much more limited. Welfare-to-work programs may impact households' economic resources, time constraints, and levels of stress. By fostering transitions from welfare to work these policies may affect both lifestyles and health status although it is not clear in which direction. This impact is an open question that has fueled some recent research but results are still inconclusive. There are primarily two domains of literature in this area. The first concerns the impact of welfare programs on health insurance (Bitler, Gelbach, & Hoynes, 2005; Borjas, 2003; DeLeire, 2006; Kaestner & Kaushal, 2003). The second area explores the relationship between welfare-to-work programs and a variety of health outcomes with a dominant role of assessment related to psychological distress. Evidence on this issue is beginning to emerge, and the results of different studies suggest that welfare-to-work programs can have significant effects on health outcomes (See Bitler & Hoynes, 2008, and Blank, 2009, for a review).
Our paper focuses on the second strand of this literature. There are still some key issues that remain open questions which the paper attempts to address. First, very few studies provide information on the effects of welfare-to-work programs both on health status and health behaviors. In this paper we evaluate the effects of a specific program on physical and mental health status and a variety of lifestyles. Second, few papers have specifically focused on work-related program participation. The mere fact of participation in work-related activities – even if recipients do not successfully find a job – may have positive benefits. Third, although previous work has provided evidence on European countries (Huber, Lechner, & Wunsch, 2009), to date the bulk of the research literature on health effects of welfare-to-work participation has almost exclusively focused on North America. This paper is based on data from the minimum income program of Madrid's Government (IMI). The Spanish model is an interesting case of welfare reform and universal health systems in the comparative context. A pioneering model of welfare-to-work was put into action some years before employment-targeted reforms were implemented in most OECD countries and transitions from employment to unemployment are rather larger than in other countries.
The main goal is testing whether participation in work-related activities yields positive results in terms of health outcomes and lifestyles. We match the program's administrative records – covering the whole history of the program – with a specific survey of former recipients who took part in different activities (2300 households). We perform propensity score matching to find that both health status – including physical and mental health problems – and behaviors outcomes are modestly better for those individuals who had taken part in work-related activities.
The structure of the paper is as follows. The following section reviews some of the pathways trough which welfare-to-work programs may affect health status and behaviors. The third section introduces the program and the data used in the empirical part. The fourth section presents the estimation strategy. Empirical results are discussed in the fifth section. The paper ends with a brief list of conclusions.
Section snippets
Background
There are likely many pathways through which welfare-to-work programs can affect health. However, theory is ambiguous on the potential effects of participation on health status and behaviors. Some of the most common approaches on the determinants of health provide very general guidelines for the setting of hypotheses and their testing. Nevertheless, it is not easy to draw from these approaches any very detailed hypothesis to be tested. In keeping with standard theories, possible income and
The IMI program
The program analyzed is the Madrid Regional Government's Welfare Program (IMI), which was set up in 1990. This welfare scheme is designed for individuals who have exhausted their rights to unemployment benefits. Social Assistance in Spain is completely decentralized and general risk of poverty is covered by regional schemes. The Madrid program can be considered an ‘average’ program within the complex set of regional schemes existing in Spain and Southern Europe. As in other European systems,
Results
The key question in our evaluation approach is whether participation in work-related activities produces better results in terms of health outcomes than not taking part in these activities. Table 3 presents estimates of the effects of participation in work-related activities on health. We begin the discussion with the estimated effects on general health problems. The main outcomes considered are physical health problems – defined as having any kind of severe problems – and mental health
Conclusions
In this paper we have tested whether participation in work-related activities yield positive results in terms of health outcomes and behaviors. Propensity score matching estimates suggest that participation in work-related activities seems to have produced positive but modest effects on health. Engaging recipients into different work-related activities may improve health outcomes even if recipients do not move into more stable forms of employment.
Results are more mixed when considering mental
Acknowledgments
We thank Barbara Wolfe, Beatriz González, Vicente Ortún, Osvaldo Feinstein, David Cantarero and seminar participants at Georgia State University (Atlanta), ZEW (Mannheim), Málaga and Madrid for helpful discussions and comments. Financial support for this research was provided by the Ministry of Science and Technology (ECO2010-21668-C03-01) and the Instituto de Estudios Fiscales.
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