Social assistance and mental health: evidence from longitudinal administrative data on pharmaceutical consumption

This paper adds to the small literature on the role of welfare benefits and mental health by studying the relationship between uptake of Social Assistance Benefit (SAB) and objective mental health measures. We use rich longitudinal administrative data on income, unemployment benefits and psychopharmaceutic prescriptions (antidepressants, anxiolytics, and hypnotics) for more than 140,000 Swedes in 2006-2012. Relative to earlier studies focusing on subjective mental health, an advantage of our approach is that we use longitudinal administrative data that do not suffer from non-response, under-reporting and self-justification biases. While we document a strong positive association between SAB and psychopharmaca consumption in ordinary least squares models, fixed effects estimates indicate that most of the association is due to unobserved individual-specific predisposition. Insofar as a relationship remains in the fixed effect models, it is driven by highly educated men. This result is consistent with earlier quantitative studies using survey data and with qualitative research suggesting that SAB uptake may be particularly stigmatizing for individuals with a higher initial socioeconomic position.