In the summer of 2012, at the height of the financial crisis for many families and as unemployment continued to rise to a peak of six million unemployed, the government of Mariano Rajoy approved a package of welfare cuts against unemployment. Among them, it reduced the amount of unemployment benefits from the sixth month. This measure harmed the health of the unemployed affected by the change, who recorded up to three times more work stoppages, a study by the Autonomous University of Barcelona (UAB) confirms today.
The analysis focuses on the reduction that the People’s Party government implemented in July 2012, overnight, in the amount of unemployment. Until then, the compensation initially represented 70% of the regulatory base (similar to the salary) and from the sixth month it was reduced to 60%. Rajoy’s executive approved that from July 15, 2012, for the newly unemployed, this reduction would be 50%. The coalition government reversed this reduction in the last parliamentary term.
“We show that the reform increased the probability of having an episode of temporary incapacity by around 1 to 2 percentage points,” shows the study, which resulted in a doubling or even tripling of leave of illness, explains Miguel Flores, professor in the Department of Economics. Applied by the Autonomous University of Barcelona (UAB) and main author of the study.
The work – signed in collaboration with Fernando G. Benavides, professor of public health at Pompeu Fabra University, and Laura Serra-Saurinac, professor of economics at the University of Girona – is still in the evaluation phase and will be published by a scientific journal. newspaper, but its results have already been announced in the economic blog Nada es Gratis.
Manuel Flores points out that, compared to other more studied variables in reductions in unemployment protection (such as the impact on employment), this research is innovative in that it verifies the cause and effect on health of people affected by the reform and, in doing so, with real data from citizens.
Thus, the analysis is carried out on some 5,000 people from the Continuous Professional Life Sample (MCVL), with the sub-sample from Catalonia, of which they also have their work stoppage processes, thanks to a cross-checking of data provided by Social Security. to the investigation.
The study confirms this increase in sick leave due to the reform, approximately two to three times the number of temporary incapacity procedures, depending on the case. The researchers arrived at these results by examining data from a group of people affected by the reduction, before and after the application of this reduction in their benefits, and also comparing them with a “control group”, made up of unemployed people who were not affected. affected the standard (for not having been unemployed for more than six months).
Longer sick leave and stress-related sick leave
The research argues that the increase in sick leave could be due to two hypotheses: a deterioration in the health of the people concerned and a “moral hazard”. The latter is reflected “when people try to take advantage of the economic opportunities of other protection systems,” explains Manuel Flores. In other words, these are people who went to the doctor to take sick leave “opportunistically”, indicates the economist.
Although researchers consider that both reasons can affect the results regarding the increase in work stoppages, there are several elements that favor the deterioration of the health of the unemployed. “The context here is very important,” underlines the researcher. In 2012, there was a deep economic recession and “finding another job was not easy, especially for certain groups,” he recalls.
The study cites other work in which this reduction in unemployment was found to lead to greater activation of the unemployed. However, this affected some workers with more employability possibilities, while there were people with “lower employability and who saw that no matter how hard they looked, they would not find a job”, explains Manuel Flores. This, in the context of a country with an unemployment rate of 26%, or around six million unemployed.
“It is very possible that the reform has deteriorated the health of some workers who are less protected or less likely to find employment due to financial difficulties, thereby increasing their risks of suffering temporary stress-related or long-term disability “, indicates the study. States.
The results show it. The increase in sick leave recorded is mainly concentrated on long-term disabilities, lasting more than 20 days, which are more controlled by medical services and which reduce the probability of “moral hazard”, says Flores.
Furthermore, citing other research carried out at the same time, the economist recalls that at that time Spain had a “very strict control system”, Spain being one of the countries of the OECD with a more elaborate control system.
The analysis of the type of victims also leans towards a deterioration of health, with researchers analyzing different disabilities potentially linked to stress. “And there, we see that the effect is very significant,” underlines Manuel Flores, with an increase of 1.2 percentage points.
“Then, we eliminate the categories of sick leave that we consider to be more subjective and more difficult to diagnose, such as lower back pain,” adds the economist, where “there could be more moral risk.” “Low back pain is a very important category of work stoppage and what we found is that, even by eliminating it, we continue to see that the reform increases the probability of having a temporary disability”, explains- he told this media.
The savings resulting from the reduction were not those expected
In conclusion, the researchers emphasize that the results represent a reduction “in the savings previously documented by the government thanks to this reform”. Although the authors did not quantify this economic effect, “this suggests that these savings are indeed overestimated, because they do not take into account other effects such as in this case possible health empowerment.”
First of all, Manuel Flores points out that there has already been an increase in public spending due to the increase in sick leave observed, to which other unstudied expenses could be added. For example, the long-term consequences of this deterioration in health, which involve increased spending on medical care.
The researcher defends the need “to have a slightly broader vision” in the implementation of public policies but also in their evaluation. For the latter, Spain should move forward “in cross-referencing data”, defends Manuel Flores, like what they achieved in this research, but which is not currently very common in our country.
