The effect of unemployment benefits on health and living standards in Turkey: evidence from structural equation modelling and regression discontinuity design
International Journal of Manpower
ISSN: 0143-7720
Article publication date: 31 August 2021
Issue publication date: 25 July 2022
Abstract
Purpose
Unemployment can negatively affect individuals, their families and communities in various ways. When individuals are out of work may experience mental and physical health problems, material deprivation and poverty. This study aims to examine the impact of unemployment benefits on health and living standards in Turkey.
Design/methodology/approach
The authors employ a structural equation modelling (SEM) to consider the simultaneous relationships among the unemployment benefits and the latent variables of health and Standard of Living (SoL). We propose a fuzzy Regression Discontinuity Design (FRDD) and a Regression Kink Design (RKD) within the SEM framework to infer causality. For the empirical analysis, the authors employ the panel Income and Living Conditions Survey (ILCS) in 2007–2015.
Findings
The authors’ findings suggest that those who receive these benefits are more likely to report higher levels of health and improve their living standards compared to the non-recipients. Furthermore, unemployment benefits replacement rates are associated with improved levels in health and living standards. The authors’ results indicate a substantial heterogeneity on the impact of unemployment benefits since males, low educated individuals and those belonging to the lower levels of income are affected more in terms of their health status and living standards.
Originality/value
The majority of earlier studies have focused on the impact of unemployment benefits on labor outcomes. The originality of this study is that we implement the FRDD and RKD within the SEM framework to explore, simultaneously, the impact of unemployment insurance on health and living standards. Moreover, future research studies can implement this framework to infer causality and explore the impact of related policies and reforms.
Keywords
Acknowledgements
The authors would like to thank the Editor and two anonymous reviewers for their valuable suggestions and constructive comments that greatly contributed to the improvement of the quality of this paper. Any remaining errors or omissions remain the responsibility of the authors. We are thankful to the participants of the Economic Research Forum (ERF) 26th Annual Conference held in July 2020 and are grateful for their comments and feedback. The authors would also like to thank Ms Ramage Nada and Ms Hoda Azmi for their valuable support during the ERF 26th Annual Conference.
Funding: This research was supported and funded by the Scientific and Technological Research Council of Turkey (TÜBİTAK) under the Career Development Program 3501 with Project No. 217K059. The financial support received from TÜBİTAK does not mean that the context of the paper is approved in a scientific sense by TÜBİTAK. This work was sponsored by the Economic Research Forum (ERF) and has benefited from both financial and intellectual support. The contents and recommendations do not necessarily reflect ERF's views.
Citation
Giovanis, E., Ozdamar, O. and Özdaş, B. (2022), "The effect of unemployment benefits on health and living standards in Turkey: evidence from structural equation modelling and regression discontinuity design", International Journal of Manpower, Vol. 43 No. 4, pp. 962-981. https://doi.org/10.1108/IJM-06-2020-0288
Publisher
:Emerald Publishing Limited
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