Unemployment and sickness allowance onset and prevalence: a longitudinal register-based study

Although unemployed people generally have poorer health than those who are employed, they are not more likely to receive sickness allowance. When they do, benefit periods tend to be longer, suggesting that non-take-up of sickness allowance may be more common among the unemployed. We examined how unemployment is associated with the onset and prevalence of sickness allowance.

We used longitudinal register data on employed and unemployed residents aged 25-62 years in Finland during 2022-2023 (N = 1,774,257). We estimated random-effects (RE) and fixed-effects (FE) linear probability models and conditional FE logistic regression for dichotomous outcomes of sickness allowance onset and prevalence, and FE Poisson regression for the total number of sickness allowance days.

Among women, the probability of sickness allowance onset was slightly lower among the unemployed than among the employed (- 1.0 percentage points, 95% CI - 1.0 to - 0.9), In within-individual analyses, transitioning into unemployment was associated with a larger reduction (- 2.3 percentage points, 95% CI - 2.4 to - 2.1). Associations among men were similar but weaker. For sickness allowance prevalence among women, the probability of receiving sickness allowance was higher among the unemployed than among the employed (1.3 percentage points, 95% CI 1.2 to 1.5), whereas within-individual analyses indicated no clear change (- 0.2 percentage points, 95% CI - 0.5 to 0.1). However, the within-individual Poisson model showed that the total number of sickness allowance days was higher during unemployment (IRR 2.08, 95% CI 1.96 to 2.21). Results for men were broadly similar, although the within-individual models indicated a small reduction in the likelihood of receiving sickness allowance (- 0.5 percentage points, 95% CI - 0.7 to - 0.3).

Unemployment is associated with the lower likelihood of entering sickness allowance, while its association with overall prevalence is weak. At the same time, unemployment is linked to a greater accumulation of sickness allowance days. These findings may reflect underutilization of sickness allowance among unemployed people. Reducing barriers to accessing sickness allowance for unemployed people would help to better identify work incapacity and ensure that those in need receive appropriate support.