Local area unemployment, individual health and workforce exit: ONS Longitudinal Study

In many developed countries, associations have been documented between higher levels of area unemployment and workforce exit, mainly for disability pension receipt. Health of individuals is assumed to be the primary driver of this relationship, but no study has examined whether health explains or modifies this relationship.

We used data from 98 756 Office for National Statistics Longitudinal Study members who were aged 40-69 and working in 2001, to assess whether their odds of identifying as sick/disabled or retired in 2011 differed by local authority area unemployment in 2001, change in local area unemployment from 2001 to 2011 and individual reported health in 2001 (self-rated and limiting long-term illness).

Higher local area unemployment and worse self-rated health measures in 2001 were independently related to likelihood of identifying as sick-disabled or retired, compared to being in work, 10 years later, after adjusting for socio-demographic covariates. Associations for local area unemployment were stronger for likelihood of identification as sick/disabled compared to retired in 2011. Associations for changes in local area unemployment from 2001 to 2011 were only apparent for likelihood of identifying as retired. For respondents that identified as sick/disabled in 2011, effects of local area unemployment in 2001 were stronger for respondents who had better self-rated health in 2001.

Strategies to retain older workers may be most effective if targeted toward areas of high unemployment. For persons in ill health, local area unemployment interventions alone will not be as efficient in reducing their exit from the workforce.