Abstract

This paper investigates the consequences of job loss on a wide range of health outcomes in France, a country with generous unemployment benefits and universal health insurance. I build a new dataset by combining administrative panel data from a French epidemiological cohort with matched employer-employee data. Focusing on exogenous job losses resulting from establishment closures, I implement a difference-in-differences approach in which I examine the evolution of the health outcomes of 20,000 treated workers relative to those of a comparable control group. My results highlight the adverse effects of job loss on mental health. Displaced workers experience a 19% increase in the use of antidepressants and anxiolytics and a 20% rise in the likelihood of consulting a psychiatrist in the short run. Hospital admissions increase by 13%. Additionally, the probability of receiving disability benefits more than doubles after displacement. Heterogeneity analyses reveal that specific vulnerable populations, including older workers, low-skilled workers, and workers living in areas with high unemployment rates, are more severely impacted by job loss. The perspective of re-employment also plays an important role in mitigating the consequences on mental health.

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