Template-Type: ReDIF-Paper 1.0
Author-Name: Lateef Akanni
Author-Name-First: Lateef
Author-Name-Last: Akanni
Author-Email: lateef.akanni@strath.ac.uk
Author-Workplace-Name: Department of Economics, University of Strathclyde
Author-Name: Otto Lenhart
Author-Name-First: Otto
Author-Name-Last: Lenhart
Author-Email: otto.lenhart@strath.ac.uk
Author-Workplace-Name: Department of Economics, University of Strathclyde
Author-Name: Alec Morton
Author-Name-First: Alec
Author-Name-Last: Morton
Author-Email: alec.morton@strath.ac.uk
Author-Workplace-Name: Department of Management Science, University of Strathclyde
Title: Conflicting economic policies and mental health: evidence from the UK national living wage and benefits freeze
Abstract: This study evaluates the mental health effects of two simultaneously implemented but
conflicting policies in the UK: the National Living Wage and the benefits freeze policy. We
employed the Callaway and Sant’Anna (2021) DID estimator to evaluate the heterogeneous
policy effects, and we found that NLW leads to positive improvements in mental health. Also,
we find that the negative impact of the benefits freeze policy constricts the NLW effects. Our
result is robust to the sensitivity analysis of the parallel trend assumption. Additional results
support the psychosocial hypothesis that increased job satisfaction is strongly correlated with
improvements in mental health. Also, we found evidence of substitution effects between work
hours and leisure. Overall, our findings suggest that the effects of the NLW cannot be
understood in isolation from how the entire suite of policy instruments operates on earnings
and liveable income for affected low-wage workers.
Length:  pages
Creation-Date: 
Revision-Date: 
Publication-Status: 
File-URL: file:///I:/SBS-Fac/Economics/Course-Admin/Discussion%20Papers/2021-2025/2022/22-10%20Conflicting%20economic%20policies%20and%20mental%20health.pdf
File-Format: Application/pdf
Number: 2210
Classification-JEL: C14, C21, C23, I18, J38
Keywords: National living wage, Benefits freeze, Mental health, Income policy, Difference in Differences, Treatment effect heterogeneity
Handle: RePEc:str:wpaper:2210