The Impact of Unemployment Benefits on the Mental Health of Underemployed Workers: Findings from the Understanding America Study.

Background: Underemployment, working fewer hours than desired, has a negative impact on mental health. Research suggests that unemployment benefits can support the mental health of unemployed individuals, but it is unknown if a similar benefit occurs for underemployed workers. This study aims to assess the relationship between unemployment benefits and mental health for underemployed workers. Methods: Data was analysed from 18 waves (June 2020-March 2021) of the COVID-19 survey, a sub-study of the Understanding America Study. The dataset included responses from individuals (n=1,241) who self-identified as employed before COVID-19. A meta-regression created pooled effect sizes measuring the impact of unemployment benefits on the change in mental health of underemployed workers with two-, four-, six-, or eight-week effect lags. Results: Receiving unemployment benefits is associated with a trend towards reduced depression at four weeks (-0.13, 95%CI -0.25; 0.00) and reduced depression six weeks later (-0.14, 95%CI -0.23; -0.05). A significant reduction in anxiety scores was seen six weeks after receiving unemployment benefits (-0.18; 95%CI -0.34; -0.01). Results from gender were mixed with female workers noting a positive effect from unemployment benefits, and male workers showing no or even negative effects, particularly on anxiety. Conclusion: These findings underscore the impact of unemployment benefits on underemployed workers' mental health. Unemployment insurance, not a typically utilized policy strategy to improve mental health, may mitigate mental health repercussions of underemployment. Expanding benefits to include underemployed workers should be considered particularly during societal crises such as COVID-19.