Under pressure: Assessing the relationship between job loss and mental health of young adults in Vietnam

We examine the association between job loss and mental health among young people in Vietnam using longitudinal data from the Young Lives survey. We exploit the timing of the first severe wave of COVID-19 which occurred between rounds of a phone survey, allowing comparison of pre- and post-wave job status and mental health for the same individuals. Using fixed effects regressions, our findings suggest that job loss is associated with increased levels of anxiety but not depression, in the short run. Specifically, job loss is linked to a 5.9 percentage point (pp) rise in the probability of experiencing symptoms of mild or severe anxiety, nearly double the pre-wave baseline. This association is particularly evident among individuals in the top earnings tercile who no longer live in their natal household, who experience nearly a 17pp increase in the probability of at least mild anxiety. Additional analysis suggests that financial strain and food insecurity may explain just over 20% of the observed associations. These findings highlight the need for targeted mental health and psychosocial support interventions for young people experiencing job loss, particularly among those who are under financial pressure as primary earners in their household.