Understanding the effect of loneliness on unemployment: propensity score matching

Loneliness and unemployment are each detrimental to health and well-being. Recent evidence suggests a potential bidirectional relationship between loneliness and unemployment in working age individuals. As most existing research focuses on the outcomes of unemployment, this paper seeks to understand the impact of loneliness on unemployment, potential interaction with physical health, and assess bidirectionality in the working age population.

This study utilised data from waves 9 (2017-19) and 10 (2018-2020) of the Understanding Society UK Household Longitudinal Study. Nearest-neighbour probit propensity score matching with at least one match was used to infer causality by mimicking randomisation. Analysis was conducted in three steps: propensity score estimation; matching; and stratification. Propensity scores were estimated controlling for age, gender, ethnicity, education, marital status, household composition, number of own children in household and region. Findings were confirmed in panel data random effect models, and heterogeneous treatment effects assessed by the matching-smoothing method.

Experience of loneliness in at least one wave increased the probability of being unemployed in wave 10 by 17.5 [95%CI: 14.8, 20.2] percentage points. Subgroup analysis revealed a greater effect from sustained than transitory loneliness. Further exploratory analysis identified a positive average treatment effect, of smaller magnitude, for unemployment on loneliness suggesting bidirectionality in the relationship. The impact of loneliness on unemployment was further exacerbated by interaction with physical health.

This is the first study to directly consider the potentially bidirectional relationship between loneliness and unemployment through analysis of longitudinal data from a representative sample of the working age population. Findings reinforce the need for greater recognition of wider societal impacts of loneliness. Given the persisting and potentially scarring effects of both loneliness and unemployment on health and the economy, prevention of both experiences is key. Decreased loneliness could mitigate unemployment, and employment abate loneliness, which may in turn relate positively to other factors including health and quality of life. Thus, particular attention should be paid to loneliness with additional support from employers and government to improve health and well-being.