We investigate whether job loss as the result of displacement causes hospitalization for stress-related diseases which are widely thought to be associated with unemployment. In doing this, we use much better data than any previous investigators. Our data are a random 10% sample of the male population of Denmark for the years 1981-1999 with full records on demographics, health and work status for each person, and with a link from every working person to a plant. We use the method of 'matching on observables' to estimate the counter-factual of what would have happened to the health of a particular group of displaced workers if they had not in fact been displaced. Our results indicate unequivocally that being displaced in Denmark does not cause hospitalization for stress-related disease. An analysis of the power of our test suggests that even though we are looking for a relatively rare outcome, our data set is large enough to show even quite small an effect if there were any. Supplementary analyses do not show any causal link from displacement or unemployment to our health outcomes for particular groups that might be thought to be more susceptible.
Copyright (c) 2006 John Wiley & Sons, Ltd.