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The Effects of Mass Layoffs on Mental Health

Author

Listed:
  • Christine Le Clainche

    (Lille University, Lille Économie Management, UMR CNRS 9221)

  • Pascale Lengagne

    (IRDES Institut de recherche et documentation en économie de la santé)

Abstract

This article assesses the effects of mass layoffs on the mental health of workers remaining in plants after layoffs, using a French survey merged with administrative health insurance data covering the period 2010–2013. We rely on the consumption of psychotropic drugs prescribed by doctors as an indicator of mental health. Results show that mass layoffs induce a sizeable rise in the use of psychotropic drugs amongst job stayers: we measure an increase of 41% in psychotropic drug consumption rates amongst them after displacement, as compared with the pre-displacement period. We find evidence for a social gradient whereby employees belonging to the lowest socio-economic are more affected by the adverse effect of mass layoffs on their mental health, leading to psychotropic drug consumption, than those in the highest socio­-economic groups.

Suggested Citation

  • Christine Le Clainche & Pascale Lengagne, 2019. "The Effects of Mass Layoffs on Mental Health," Working Papers DT78, IRDES institut for research and information in health economics, revised May 2019.
    • Handle: RePEc:irh:wpaper:dt78
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    4. Or, Zeynep & Gandré, Coralie & Durand Zaleski, Isabelle & Steffen, Monika, 2022. "France's response to the Covid-19 pandemic: between a rock and a hard place," Health Economics, Policy and Law, Cambridge University Press, vol. 17(1), pages 14-26, January.

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    JEL classification:

    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
    • I10 - Health, Education, and Welfare - - Health - - - General

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