Enhanced unemployment benefits, mental health, and substance use among low-income households during the COVID-19 pandemic

OBJECTIVE: To buffer the economic impacts of the pandemic-induced economic downturns, the U.S. government passed major economic stimulus bills that provided cash payments to affected citizens and a large boost to unemployment benefits. We ask what impact these enhanced safety-net policies have had on mental health and stress-induced substance use among low-income Americans, especially enhanced unemployment insurance (UI) benefits, which constituted a large economic transfer to those eligible. METHODS: Using individual fixed effects analysis of a panel of nearly 900 low-income Americans since the start of the pandemic from the Understanding America Survey, we examine how receipt of enhanced unemployment benefits has impacted the mental health burden and substance use behaviors of low-income Americans. We additionally examine the buffering effect of a set of other safety-net measures (Stimulus, Medicaid, SNAP, TANF, housing assistance, EITC, WIC, and CHIP). RESULTS: We found that job loss, regardless of benefit receipt, was associated with increased stress and decreased average substance use, driven by reduced smoking when compared with those were employed. Yet, when factoring in UI receipt we see that receiving UI was associated with reduced stress, but no impact on depression or substance use. In contrast, those who did not receive UI experienced greater stress compared with those who were employed. Overall, we found that people who remained employed used substances more than people who were unemployed regardless of UI receipt with the exception of drinking. CONCLUSIONS: We conclude that enhanced unemployment offset some of the negative mental health effects of the pandemic and did not increase routine substance use among the unemployed.