The impact of unemployment on individual mental health and wellbeing has received extensive academic and policy attention. It is well established that in contemporary Western societies paid work plays a fundamental role in individual identity, mental health and wellbeing by providing material and psychosocial benefits such as income, time structure, enforced activity, social contact, collective purpose and status (Fryer, 1986
; Jahoda, 1982
; Wood and Burchell, 2018
). It has been shown that unemployed people who are deprived of these psychosocial benefits are more likely to experience mental illness, anxiety and lower levels of happiness and life satisfaction (Coutts et al., 2014
; Kamerāde et al., 2019
). Given the potential adverse health impact of unemployment, policy interventions to improve mental health and help the unemployed return to work are high on the political agenda of many countries.
One of the most important approaches used to address unemployment are Active Labour Market Programmes (ALMPs), which are delivered in the form of various types of employability provision and welfare-to-work policies. Although ALMPs have been commonly adopted in Scandinavian countries, they have gained popularity in the UK since the New Deal, a large-scale workfare programme introduced by the New Labour government in 1998. Under workfare and the move toward activation, job seekers became increasingly compelled to undertake work or ALMPs in order to receive state benefits. The New Deal became the dominant labour market policy for tackling unemployment from 1998 to 2010, introducing various ALMPs which targeted diverse population groups such as youth and lone parents. The New Deal was replaced in 2010 by the Work Programme under the Coalition government and later the Conservative party (Orton and Green, 2019
). Compared with ALMPs in continental Europe and Scandinavian countries, which tend to include more human capital development aspects, ALMPs in the UK have tended to focus more on providing job search skills and career counselling. However, in recent years, there has been a convergence in ALMPs in different countries, with the overall aim to improve participants’ employability by providing a wide range of services such as job search assistance, human capital training and wage and employment subsidies (Coutts et al., 2014
Whereas the economic evidence on the effectiveness of ALMPs is mixed in terms of generating employment outcomes (Card et al., 2018
; Coutts et al., 2014
), such programmes have been found to mitigate the health-damaging effects of unemployment in the United States and Europe (Ayala and Rodríguez, 2013
; Sage, 2015b
; Stuckler et al., 2009
; Wulfgramm, 2014
). The underpinning framework proposed by Coutts (2005
), suggests that ALMPs can imitate some of the psychosocial attributes or non-pecuniary aspects of the employment experience, particularly time structure, meaningful activities (e.g. learning job search skills), social contact with fellow participants and social support provided by the work coaches, that are widely reported to be missing during spells of unemployment (Coutts, 2005
). These psychosocial features are regarded as active elements embedded in the operation of ALMPs that could produce a more salutogenic or health-beneficial psychosocial environment compared to open unemployment, and therefore mediate the negative health effects of unemployment (Coutts, 2009
However, there are several important gaps in understanding the mental health impacts of ALMPs. Firstly, Coutts (2009)
argues that in ALMPs people are neither unemployed nor employed, but occupy an intermediate stage in terms of labour market status with access to some psychosocial benefits of regular employment. However, to what extent ALMPs can emulate the psychosocial experience of regular employment and provide mental health benefits remains largely theoretical and unclear given the limited evidence. This is further complicated by the fact that the effects of employment on mental health are not always positive, varying significantly with job quality. Thus, the first objective of this study is to compare the effects of ALMPs on individuals’ mental health with the effects of paid working, with various job qualities defined by working time, occupational status and precariousness.
We also conduct additional analyses to consider diverse types of ALMPs, which may have different effects on participants’ mental health. Secondly, the existing evidence on ALMPs and health assumes that the extent to which people in ALMPs can access the same health benefits of employment is homogeneous across population groups. However, given the widely reported gender differences in cultural norms, work centrality and labour market experiences (Hochschild, 1989
), the degree to which ALMPs simulate the employment experience in terms of providing mental health benefits may also vary with gender. Thus, the second objective is to explore whether the health effects of ALMPs relative to paid work vary by gender
By achieving both objectives, this article provides important insights into the mental health benefits of ALMPs and how they compare to various types of employment with different job quality characteristics. Given the predicted rapid rise in global unemployment due to Covid-19 and high levels of precarious employment, this article suggests that the design of ALMPs should not just focus on short-term employment outcomes, but must pay attention to the health and wellbeing benefits of participation and the long-term effects on participants’ employment and job quality. Moreover, by analysing gender differences, this article provides a more nuanced understanding of the differential effects of labour market policies on mental health, highlighting the need for policy-makers to adopt a more gender-specific approach when designing policies for the unemployed.
Data and sample
The data used in this study are from 18 waves (1991–2009) of the British Household Panel Study (BHPS) and nine waves (2009–2019) of its successor Understanding Society: United Kingdom Household Longitudinal Study (UKHLS). In its first wave, in 1991, the BHPS conducted a nationally representative survey of over 10,000 individuals from 5500 British households using a stratified and clustered sampling design, interviewing the same households in each subsequent year. In 2009, the BHPS had 18 consecutive waves and was replaced by UKHLS, which sampled over 50,000 individuals from 30,000 households in its first wave and by 2019 had nine completed waves. This study has combined data from both BHPS and UKHLS to create long-term panel data including 27 waves from 1991 to 2019. After excluding full-time students and retired individuals due to their loose attachment to the labour market, the final analytical sample was 380,748 person-wave observations from 70,593 respondents. The UKHLS longitudinal weights were used to adjust for the complex survey design, non-response and attrition rates.
The dependent variable is the 12-item General Health Questionnaire (GHQ), which is a widely used reliable mental health measurement (Golderberg and Williams, 1988
). The questionnaire asked respondents 12 questions about their mental health and wellbeing on a four-point scale ranging from 0 (better than usual) to 3 (much less than usual) (Golderberg and Williams, 1988
). Following previous research, the answers to GHQ-12 questions were reversed and summated to construct a metrical scale ranging from 0 (worst mental health) to 36 (best mental health) (Kamerāde et al., 2019
The key independent variable was labour market status. We first distinguished four main categories of labour market status: employed, unemployed, inactive and those reporting on a government training scheme. Most previous research has used government training schemes to measure ALMPs because ALMPs are defined as a series of government programmes and social expenditure that aim to improve overall employment rates in a society (Sage, 2015a
; Wulfgramm, 2014
). We followed this method used in previous research, although it is important to note that both concepts are not identical and the government training schemes may contain some other programmes not related to employment. We further analysed Annual Population Surveys with more detailed measures of various types of ALMPs (see Further Analysis 4, pp. 14–15). Reassuringly, the results are consistent with our main analyses but provide more nuanced insights into how different types of ALMPs affect respondents’ mental health.
Given the heterogeneity of employment, we compared ALMPs with various types of employment and different job quality characteristics defined by working time, occupational status and type of contract. In terms of working time, we divided the employed people into full-time (35 hours per week or more) and part-time (less than 35 hours per week) employees. Occupational status is defined by the National Statistics Socio-economic Classification (NS-SEC) including three categories: high occupational status (managerial and professional jobs), middle occupational status (intermediate occupations such as clerical, sales, service, and small employers and own account workers), low occupational status (semi-routine and routine jobs). The type of contract was used to measure the precariousness of a job, consisting of permanent and temporary employment contracts.
Several individual and household characteristics that influence employment status, working hours and mental wellbeing were controlled for. They included age (grand mean centred), age squared to capture the potential curvilinear relationship, marital status, presence of children, longstanding illness and household income. Overall, ALMP participants were younger and more likely to be single than any other groups. Also, people who were employed and participated in ALMPs had lower levels of mental distress and higher household income than those who were unemployed and inactive (for more details, see Table A1
in the online supplementary material).
This study used fixed effects (FE) regression models, which have at least two important advantages over cross-sectional analysis. Firstly, by using only ‘within-individual’ variation (i.e. how changes
in labour market status are linked to changes
in mental health within each individual over time), FE regression eliminated the unobserved heterogeneity, confounding effects from all time-constant variables, and enabled a more accurate estimate of the causal relationship between work and mental health (Allison, 2009
). Secondly, FE models could help understand the dynamic effects of ALMPs on mental health by using lagged independent variables in panel data (Allison, 2009
). Given the widely acknowledged difference between men and women’s work orientations, employment trajectories and experiences, FE models were fitted separately by gender, controlling for other socio-demographic characteristics.
Discussion and conclusions
In recent years, the effects of ALMPs on participants’ mental health have received much scholarly and policy attention. Although ALMPs are thought to mitigate the health-damaging effects of unemployment by providing participants with psychosocial attributes of the employment experience (Coutts et al., 2014
), little is known about the extent to which ALMPs can replicate different types of paid employment in terms of psychosocial attributes for men and women.
This research has three key findings. Firstly, we find that the extent to which ALMPs emulate the mental health benefits of employment varies significantly by gender. For men, participation in the ALMPs does not appear to provide them with mental health benefits equivalent to those they gain from employment, especially in high quality jobs. This is possibly because ALMPs are regarded as a temporary and transitional process before they find formal paid employment. However, women appear to be more responsive in terms of mental health and wellbeing, given that participation in ALMPs was found to have similar health benefits to regular employment regardless of job quality. This is consistent with Coutts’ suggestion that ALMPs can emulate the psychosocial experience of regular employment via their active elements, such as social contact and support, time structure and routine, human capital training and employment assistance, which could in turn improve participants’ self-efficacy and generate the associated mental health and wellbeing benefits (Coutts et al., 2014
The observed gender health difference may be explained by the male breadwinner hypothesis in that paid work appears to have larger impacts on men’s social status, identity and mental health compared to women (Hochschild, 1989
). Alternatively, this could also be due to women’s negative labour market experiences (e.g. discrimination, harassment or work–life conflicts) that may offset mental health benefits from employment (Scott et al., 2010
), or due to gender differences in more nuanced types of ALMP participation. These explanations help us understand why women benefit equally from participation in ALMPs and employment, whereas for men these benefits are derived from engaging in formal employment rather than the quasi-transitional status embodied in ALMPs. In policy terms, providers of employability interventions should be aware of the differential responsiveness in terms of health and wellbeing benefits between male and female participants, highlighting the need of a more gender-sensitive policy design. However, this does not mean that ALMPs should entirely focus on women as ALMPs may act as interventions which help men into work and brings about subsequent health improvements.
Secondly, while men may obtain more mental health benefits from formal employment than participation in ALMPs, such benefits were more pronounced when they worked in full-time, permanent, high-status jobs, and these effects did not last more than a year. This result suggests that, for men, ALMPs can only provide a limited number of health and wellbeing benefits within a short period of time and are far from being as salutogenic as when they are fully employed in high quality jobs. Previous research comparing the health and wellbeing effects of ALMPs with employment may have overlooked important nuances and details within the employed samples (Sage, 2015b
; Wulfgramm, 2014
). Given that the aim of ALMPs is to provide a temporary and supportive transition to employment, many distinct benefits that can be derived from high-status jobs, such as income and social status, cannot be readily imitated by ALMPs. The recent Marmot Review 2020 recommended that ‘good quality’ ALMPs can be used to help protect the health of the unemployed and return people to work (Marmot et al., 2020
). However, it is unclear from the existing evidence as to what constitutes a good quality ALMP. Our results offer further insights into how good quality ALMPs can be designed. Given the rapid increase in Covid-19-related job loss and the rise of precarious employment, it suggests that more policy attention should be focused on the post-ALMP experiences and whether there are good quality jobs that participants can take up because our results show that high quality jobs are likely to benefit mental health and wellbeing.
Thirdly, we find that different types of ALMPs and employability provision have heterogeneous effects on participants’ mental health and wellbeing. ALMPs focusing on human capital, education and skills development were found to have greater mental health and wellbeing benefits than the traditional employment assistance ALMPs, which focus on job search skills and employment subsidies. This could be explained by the fact that the education and vocational training involved in human capital ALMPs are better able, following Jahoda (1982)
, to satisfy participants’ latent psychosocial needs, such as identity, activity, bolstering social support and social networks, which improves individuals’ self-efficacy, motivation and confidence in finding a job. In contrast, ALMPs and employability provision that offer the more basic job search skills are less able to replicate the psychosocial experience of employment and associated latent benefits. This finding lends further insights into the framework proposed by Coutts (2009)
in terms of the diverse effects of ALMPs on mental health and wellbeing and the nature of the active elements and mechanisms embodied in ALMPs which help to generate changes in mental health, wellbeing and behaviour.
There are a number of limitations with our study, which can guide the focus of future research. Firstly, although we have used longitudinal data and fixed effects models, readers should be cautious in interpreting our results as causal relationships due to potentially omitted time varying variables such as changing labour market situations. Secondly, although we have identified a number of active elements within ALMPs that could improve participants’ mental health, it is unclear how these active elements work jointly to change participants’ behaviour and which one is the most important. This requires future research using qualitative methods (e.g. ethnography and participant observation) to understand the intervention processes and active elements used in ALMPs, why they work and how. Thirdly, we have proposed that gender differences in the health effects of ALMPs and employment could be explained by the male breadwinner hypothesis and women’s negative labour market experiences. However, due to data limitations, we have not tested either explanation, and there may be other reasons that may explain the gender differences. Future research using more comprehensive data could profitably explore why there is a gender difference in the mental health benefits from the transition between ALMPs and employment.
Despite these limitations, this study suggests that the design of ALMPs and employability provision should not just focus on short-term employment outcomes as indicators of effectiveness, but need to pay attention to the health and wellbeing benefits of participation and the long-term effects on participants’ employment and job quality. As Coutts (2009)
suggests, improvements in mental health and wellbeing may help to enhance the employability of participants and move them closer to labour market entry. Currently, in the UK, there are policy efforts to focus on the ‘distance travelled’ (i.e. progress achieved) by ALMP participants in terms of employment outcomes. The inclusion of mental health and wellbeing as outcomes provides potential indicators for measuring ‘distance travelled’. Given the upcoming economic recession and high unemployment rates due to Covid-19, ALMPs will become even more crucial to policy. Our study offers important insights into policy understanding of the impacts of ALMPs and how they can be designed to help reduce the mental health burden of unemployment.