16.09.2021 | MICHAEL SCHRØDER
FOTO: Adobe Stock
The psychological well-being of unemployed people is not only affected by financial and social insecurity, reduced self-esteem or other known causes of stress. The very demands of the Danish unemployment system, e.g. the documentation requirements regarding active job search, mandatory meetings at the job centre and interviews with job consultants, contribute to the much higher level of stress found among unemployed individuals and people outside the labour market compared to people in employment, an imbalance documented by multiple studies.
In the national health profile from 2017, the Danish Health Authority found that: “While just about every fifth employed individual experiences a high level of stress, this is true for about half of all unemployed individuals, early retirement pensioners and people who are otherwise outside the labour market.”*
It has often been asked how it is possible to feel stressed by inactivity, and sceptics and advocates for a benefit programme governed by the sticks-and-carrots logic of incentives and penalties have argued the pros and cons of the system.
However, this discussion has so far been based primarily on opinions rather than facts, seeing as scientifically speaking, it is very hard to separate – and thereby measure – the causes of the high stress levels among unemployed people.
"In any case, you could ask whether it is beneficial to place as strict demands on the unemployed as we do today.
Martin Bækgaard, professor, Department of Political Science at Aarhus BSS, Aarhus University
This has now changed. The researchers professor Martin Bækgaard and postdoc Julian Christensen from the Department of Political Science at Aarhus BSS (Aarhus University) have written a research article in the Journal of Public Administration Research and Theory together with associate professor Kim Sass Mikkelsen and PhD student Jonas Krogh Madsen from the Department of Social Sciences and Business at Roskilde University. In this article, they find that a reduction in the compliance demands of the Danish unemployment benefit programme actually improves the psychological well-being of unemployed people.
In other words: In and of themselves, these demands and restrictions contribute to the feelings of being under pressure experienced by unemployed people, for instance in the form of stress and a sense of autonomy loss.
The opportunity to conduct this study arose when the Danish society suddenly entered lockdown on 11 March 2020 in the effort to combat the COVID-19 pandemic.
This led to an immediate suspension of the compliance demands placed on recipients of unemployment benefits by Danish labour market policies.
“Back then, we were conducting research into how the experience of financial strain impacts the psychological well-being of unemployed people. But with the suspension of the compliance demands, we were handed a great opportunity to investigate one of the most fundamental questions surrounding the unemployment benefit programme: How the compliance demands affect unemployed individuals’ experience of psychological costs in the form of stress, a sense of autonomy loss and stigma,” says professor Martin Bækgaard. Since 2018, he has conducted research into how bureaucracy and administrative burdens impact citizens. At the time, Martin Bækgaard received DKK 11.2 million from the European Research Council for this research project.
Across three studies, the researchers found that relaxed demands reduced the experience of psychological costs in unemployed members of 3FA, the unemployment insurance fund of the United Federation of Danish Workers, as well as in unemployed recipients of social benefits. In all three studies, it turned out that a reduction in demands produced an increased sense of autonomy, and in at least two of the studies, the unemployed participants also experienced less stress. In addition, the researchers found that when you call special attention to the reduction in compliance demands, the experience of being burdened shifts among the recipients of unemployment benefits.
“The results are notable for multiple reasons. Naturally, we cannot rule out that the results might be influenced by the national atmosphere of crisis following in the wake of lockdown, which came into force due to a large-scale health crisis and – on top of that – involved the risk of a financial crisis. But this atmosphere of crisis would most likely influence our results the other way around, as research suggests that lockdown generally had a negative, psychological effect on the population. However, in the case of unemployed people, we see a positive, psychological effect,” Martin Bækgaard points out.
The researchers’ conclusions are based on three separate studies: A survey experiment involving randomisation, a quasi-experiment (a before-and-after study without randomisation) and a natural experiment with randomisation.
The results of all three studies suggest that the suspension of compliance demands led to a decreased level of stress and an increased sense of autonomy.
Neither of the three studies tell us which of the suspended compliance demands affect unemployed people the most – and thus might contribute the most to stress and autonomy loss. Is it the specific number of jobs you are required to apply for each week, the mandatory interviews at the job centre, the mandatory activation of job seekers, or something completely different?
The researchers would like to explore these questions further.
“We know that the stress levels of unemployed people increase the closer you get to the day they have been summoned for a meeting at the job centre. For this reason, we are conducting a follow-up study to take a closer look at the meetings with caseworkers,” says Martin Bækgaard, who thinks the present study should give rise to a thorough examination of the demands and restrictions of the Danish unemployment system.
“It is probably not feasible to avoid all compliance demands, but perhaps it would be possible to examine how you could develop a more flexible system, for instance in relation to mandatory meetings at the job centre. Is it really necessary to meet on-site? Or could you possibly conduct the meeting by phone or digital means?
In recent years, several commissions have come up with suggestions for changes to the unemployment insurance system as well as the benefit system in its entirety. The researchers hope that the new Danish commission responsible for reforms can draw inspiration from the study when developing new suggestions to reform the Danish labour market policies.
“In any case, you could ask whether it is beneficial to place as strict demands on the unemployed as we do today. Perhaps this is particularly relevant in relation to vulnerable groups of unemployed people,” says Martin Bækgaard.
Facts about the study:
The research results are based on three studies: A survey experiment involving randomisation, a quasi-experiment (a before-and-after study without randomisation) and a natural experiment with randomisation.
Authors: Professor Martin Bækgaard, Department of Political Science, Aarhus BSS (Aarhus University); postdoc Julian Christensen, Department of Political Science, Aarhus BSS (Aarhus University); associate professor Kim Sass Mikkelsen, Department of Social Sciences and Business, Roskilde University; and PhD student Jonas Krogh Madsen, Department of Social Sciences and Business, Roskilde University.
Published in the Journal of Public Administration Research and Theory. Read the research article in full.
Financing: ERC Starting Grant (POAB – 802244).
What the researchers did:
Study 1 was a survey experiment designed to measure the extent to which information and knowledge of the revised rules affected the experience of autonomy, stress and stigma among unemployed individuals. Questionnaires were sent to 5,000 randomly selected unemployment insurance recipients in the 3FA database. The recipients were divided into two groups, who received information about the change in rules either before or after answering a list of specific questions as well as questions regarding their psychological well-being.
The study was conducted in the period 7-17 April, about three weeks after the compliance demands had been suspended. The researchers received approximately 1,000 responses, and the result was clear: Information and knowledge of the changes had a significant effect on unemployed people’s experience of stress and autonomy in particular, and to some extent also their experience of stigma.
Before and after
In study 2, 10,000 unemployment insurance recipients from 3FA were asked the same questions about their psychological well-being as in study 1, but this time, they were asked before and after lockdown and the subsequent suspension of compliance demands that came into force on 12 March 2020.
1,041 responses received from 9 to 12 March were compared with 1,573 responses received after 12 March and until 30 March.
In this case, the researchers noted that a number of unemployed individuals experienced less stress and an increased sense of autonomy after the suspension of compliance demands. However, the results of this study are slightly less certain.
In contrast to study 1, it was not possible to measure any change in the experience of stigma.
Social benefit recipients
Seeing as both study 1 and study 2 were conducted among unemployment insurance recipients in 3FA, it was difficult to generalise the results to encompass all recipients of unemployment benefits. For this reason, the researchers utilised an almost identical experiment among unemployed recipients of social benefits categorised as ‘ready for a job’. The only difference between this study and the previous one was that the social benefit recipients had been randomly selected to participate in the study either before or after lockdown and the subsequent suspension of compliance demands.
Just as in study 2, the participants were asked before and after lockdown, and the results were almost identical to those of study 2: The participants who responded after the suspension of demands experienced less stress and an increased sense of autonomy compared to those who answered prior to lockdown. Again, there was not any noticeable change in the experience of stigma. But this time, the result was certain.