In the summer of 2012, during the worst of the financial crisis for many families and when unemployment continued to rise towards the peak of six million unemployed people, Mariano Rajoy’s Government approved a package of cuts to unemployment protection. Among them, it reduced the amount of unemployment benefit starting in the sixth month. This measure harmed the health of unemployed people affected by the change, who recorded up to three times as many sick leave, a study by the Autonomous University of Barcelona (UAB) now confirms.
The analysis focuses on the cut that the Popular Party Government applied in July 2012, from one day to the next, in the amount of unemployment. Until then, initially the benefit consisted of 70% of the regulatory base (similar to the salary) and from the sixth month it was reduced to 60%. Rajoy’s Executive approved that, as of July 15, 2012, for the newly unemployed this reduction would be 50%. The coalition government reversed the cut in the last legislature.
“We show that the reform increased the probability of having an episode of temporary disability by approximately 1-2 percentage points,” he says. the investigationwhich translated into doubling or even tripling medical leave, explains Manuel Flores, professor in the Department of Applied Economics at the Autonomous University of Barcelona (UAB) and lead author of the study.
The work – which is signed together with Fernando G. Benavides, professor of Public Health at the Pompeu Fabra University, and Laura Serra-Saurinac, professor of Economics at the University of Girona – is still in the evaluation phase to be published by a scientific journal. , but its results were already advanced in the economic blog Nothing is Free.
Manuel Flores highlights that, compared to other variables more studied in the reductions in unemployment protection (such as the repercussions on employment), this research is innovative in verifying the cause-effect on the health of those affected by the reform and doing so, Furthermore, with real data from citizens.
Thus, the analysis is carried out on some 5,000 people from the Continuous Sample of Working Lives (MCVL), with the subsample of Catalonia, of which they also have their medical leave processes, thanks to a cross-reference of data provided by Social Security to the investigation.
The study confirms this increase in medical leave due to the reform, of around double and triple the number of temporary disability processes, depending on the case. The researchers arrive at these results by examining the data of a group of those affected by the cut, before and after this reduction in their benefits is applied, and also compare it with a “control group”, of unemployed people who were not affected. affected the norm (for not having been unemployed for more than six months).
More long sick leave and stress sick leave
The research maintains that the increase in medical sick leave may be due to two hypotheses: a worsening of the health of those affected and “moral risk.” The latter reflects “when people try to take advantage of the economic opportunities of other protection systems,” explains Manuel Flores. That is, 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 sick leave, there are several elements that favor the worsening of the health of unemployed people. “The context here is very important,” highlights 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 works in which it was found that this reduction in unemployment led to greater activation of the unemployed. However, this reached some workers with more employability opportunities, while there were people with “lower employability and who saw that no matter how hard they searched they were not going to find a job,” says Manuel Flores. That, in a context of a country with a 26% unemployment rate, about six million unemployed people.
“It is very possible that the reform has worsened the health of some workers who are less protected or less likely to find employment due to financial stress, increasing their chances of suffering from a temporary stress-related or long-term disability,” the study states.
The results show it. The increase in sick leave recorded is especially concentrated in long-term disabilities, lasting more than 20 days, which are more controlled by medical services and that reduces the probability of “moral risk,” Flores maintains.
Besides, citing other research About the same time, the economist remembers that at that time Spain had a “very strict control system”, Spain being one of the OECD countries with a more elaborate supervision system.
The analysis of the type of casualties also leans towards deterioration in health, as researchers analyze various disabilities that are potentially related to stress. “And there we see that the effect is very large,” highlights Manuel Flores, with an increase of 1.2 percentage points.
“Then we eliminate categories of sick leave that we believe are more subjective and more difficult to diagnose, such as low back pain,” adds the economist, where “there could be more moral risk.” “Low back pain is a very important category of sick leave and what we found is that, even when we eliminate them, we continue to see that the reform increases the probability of having a temporary disability,” he explains to this medium.
The savings from cutting were not as expected
In conclusion, the researchers highlight that the results represent a reduction “in the savings previously documented by the Government thanks to this reform.” Although the authors have not quantified this economic effect, “what this does suggest is that this savings is effectively overestimated, because it does not take into account other effects such as in this case the possible empowerment in health.”
First of all, Manuel Flores highlights that there has already been an increase in public spending due to the increase in observed medical leave, to which other unstudied expenses could be added. For example, long-term consequences of these worsening health, which involve more spending on medical care.
The researcher defends the need to “have a slightly broader vision” when implementing public policies and also when evaluating them. For the latter, Spain should advance “in the cross-referencing of data,” defends Manuel Flores, like what they have achieved in this research, but which is not very common at the moment in our country.
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