CRES Seminar (Internal): Manuel Serrano Alarcón

CRES Seminar (Internal): Manuel Serrano Alarcón

"The effect of long-term unemployment subsidies on middle-age workers health" 

  • Date: 12nd of december 12:00h-13:00h 
  • Room: Campus Ciutadella



Manuel Serrano Alarcón, Phd candidate in Global Public Health at Escola Nacional de Saúde Publica of Nova University of Lisbon. 

"The effect of long-term unemployment subsidies on middle-age workers health" with José Ignacio García-Pérez, Department of Economics, Universidad Pablo Olavide and Judit Vall Castelló Department of Economics & Institut d’economia de Barcelona (Ieb), Universitat de Barcelona and Center for Research in Economics and Health, Universitat Pompeu Fabra (CRES).




Our objective is to estimate the health effects of a long-term unemployment subsidy. In order to do that, we exploit a Spanish reform that increased the age eligibility threshold to receive such a subsidy from 52 to 55 years old in July 2012.  


We use as treatment group individuals turning 52 just before the reform (born in the first semester of 1960), which had access to the subsidy and compare their health outcomes to those turning 52 just after the reform (born in the second semester of 1960) who no longer had access to the unemployment subsidy when turning 52. We first use a rich administrative database from the Social Security and a triple diff-in-diff specification (semester of birth, cohort and post reform period) to explore the differences in labour market outcomes between the treatment and the control group during the first three years after the implementation of the reform. Next, we use a dataset that includes the universe of hospitalizations in Spain occurring from 2009 to 2014 in order to explore the impacts of the subsidy on hospitalizations. We also estimate heterogeneous effects by sex and disease-group of main diagnoses. We also use data from waves 5 (2013) and 6 (2016) of the Survey of Health, Ageing and Retirement in Europe (SHARE) to shed light on the effects on mental health, self-reported health and consumption of drugs related to mental illnesses.


Our results show that the reform had an effect on the probability of receiving a LTU subsidy. Those unaffected by the reform, had a higher probability of receiving the LTU subsidy; and lower probability of working or being unemployed (without receiving the LTU subsidy). The effect was higher for men than women. We did not find a significant effect of the reform on the overall number of hospitalizations. However, disaggregating by disease of main diagnosis and sex, we find that men from the cohort unaffected by the reform (i.e.: having the right to access the LTU subsidy) reduced their hospitalizations due to injuries by 11,7%. Lastly, we find that the semester and cohort unaffected by the reform show a significantly (at 10%) better self-reported health, lower euro-d depression score and lower doctor visits, after the reform


Results shows how a LTU benefit can improve health of the middle age workers who are in a disadvantaged position in the labour market, although in a very limited manner. On the one hand, results show how the LTU benefit reduced hospitalizations for injuries of men, who were actually those doing more physically demanding jobs. On the other hand, effects on mental health are inconclusive, with no effect on hospitalizations, but a slightly better self-reported mental health for the cohort who had the right to access the LTU subsidy.