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Unemployment and Mental Health: An Instrumental Variable Analysis Using Municipal-level Data for Finland for 2002–2019

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  • Saqib Amin

    (University of Oulu)

  • Marko Korhonen

    (University of Oulu)

  • Sanna Huikari

    (University of Oulu)

Abstract

We explore the effect of unemployment on mental health, using data from Finnish municipalities for the period 2002–2019. We measure mental illness using a mental morbidity index, as well as mental health care utilization and the use of antidepressants. There are significant differences across municipalities in Finland in both prevalence of mental health issues and illnesses, along with unemployment. Establishing a causal link between these two variables is challenging because of their reverse causality and joint determination. Using instrumental variable estimation, we establish a causal effect from unemployment to mental health. We present a strong connection between unemployment and mental health, especially for males between 25 and 64 years of age. Similar connection is not found among younger or older males, nor among females. Our findings are robust, since the results hold for various mental health measures. Our results reflect the possibility of differing mental health effects across the sources of unemployment.

Suggested Citation

  • Saqib Amin & Marko Korhonen & Sanna Huikari, 2023. "Unemployment and Mental Health: An Instrumental Variable Analysis Using Municipal-level Data for Finland for 2002–2019," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 166(3), pages 627-643, April.
    • Handle: RePEc:spr:soinre:v:166:y:2023:i:3:d:10.1007_s11205-023-03081-1
    DOI: 10.1007/s11205-023-03081-1
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