IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

Bounding the Causal Effect of Unemployment on Mental Health: Nonparametric Evidence from Four Countries

Listed author(s):
  • Cygan-Rehm, Kamila

    ()

    (University of Erlangen-Nuremberg)

  • Kühnle, Daniel

    ()

    (University of Erlangen-Nuremberg)

  • Oberfichtner, Michael

    ()

    (University of Erlangen-Nuremberg)

Registered author(s):

    An important, yet unsettled, question in public health policy is the extent to which unemployment causally impacts mental health. The recent literature yields varying findings, which are likely due to differences in data, methods, samples, and institutional settings. Taking a more general approach, we provide comparable evidence for four countries with different institutional settings – Australia, Germany, the UK, and the US – using a nonparametric bounds analysis. Relying on fairly weak and partially testable assumptions, our paper shows that unemployment has a significant negative effect on mental health in all countries. Our results rule out effects larger than a quarter of a standard deviation for Germany and half a standard deviation for the Anglo-Saxon countries. The effect is significant for both men and women and materialises already for short periods of unemployment. Public policy should hence focus on early prevention of mental health problems among the unemployed.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL: http://ftp.iza.org/dp10652.pdf
    Download Restriction: no

    Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 10652.

    as
    in new window

    Length: 53 pages
    Date of creation: Mar 2017
    Publication status: forthcoming in: Health Economics
    Handle: RePEc:iza:izadps:dp10652
    Contact details of provider: Postal:
    IZA, P.O. Box 7240, D-53072 Bonn, Germany

    Phone: +49 228 3894 223
    Fax: +49 228 3894 180
    Web page: http://www.iza.org

    Order Information: Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
    Email:


    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

    as
    in new window


    1. Gundersen, Craig & Kreider, Brent, 2009. "Bounding the effects of food insecurity on children's health outcomes," Journal of Health Economics, Elsevier, vol. 28(5), pages 971-983, September.
    2. Charles F. Manski, 1997. "Monotone Treatment Response," Econometrica, Econometric Society, vol. 65(6), pages 1311-1334, November.
    3. Browning, Martin & Heinesen, Eskil, 2012. "Effect of job loss due to plant closure on mortality and hospitalization," Journal of Health Economics, Elsevier, vol. 31(4), pages 599-616.
    4. Clark, Andrew E & Georgellis, Yannis & Sanfey, Peter, 2001. "Scarring: The Psychological Impact of Past Unemployment," Economica, London School of Economics and Political Science, vol. 68(270), pages 221-241, May.
    5. Marcus, Jan, 2013. "The Effect of Unemployment on the Mental Health of Spouses – Evidence from plant closures in Germany," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 546-558.
    6. Kenneth A. Couch & Dana W. Placzek, 2010. "Earnings Losses of Displaced Workers Revisited," American Economic Review, American Economic Association, vol. 100(1), pages 572-589, March.
    7. Timothy J. Classen & Richard A. Dunn, 2012. "The effect of job loss and unemployment duration on suicide risk in the United States: a new look using mass‐layoffs and unemployment duration," Health Economics, John Wiley & Sons, Ltd., vol. 21(3), pages 338-350, 03.
    8. Martin Salm, 2009. "Does job loss cause ill health?," Health Economics, John Wiley & Sons, Ltd., vol. 18(9), pages 1075-1089.
    9. Schaller, Jessamyn & Stevens, Ann Huff, 2015. "Short-run effects of job loss on health conditions, health insurance, and health care utilization," Journal of Health Economics, Elsevier, vol. 43(C), pages 190-203.
    10. Janet Currie, 2009. "Healthy, Wealthy, and Wise: Socioeconomic Status, Poor Health in Childhood, and Human Capital Development," Journal of Economic Literature, American Economic Association, vol. 47(1), pages 87-122, March.
    11. Martin Browning & Anne Moller Dano & Eskil Heinesen, 2006. "Job displacement and stress-related health outcomes," Health Economics, John Wiley & Sons, Ltd., vol. 15(10), pages 1061-1075.
    12. Grossman, Michael, 1972. "On the Concept of Health Capital and the Demand for Health," Journal of Political Economy, University of Chicago Press, vol. 80(2), pages 223-255, March-Apr.
    13. Kreider, Brent & Pepper, John V., 2007. "Disability and Employment: Reevaluating the Evidence in Light of Reporting Errors," Journal of the American Statistical Association, American Statistical Association, vol. 102, pages 432-441, June.
    14. Kuhn, Andreas & Lalive, Rafael & Zweimüller, Josef, 2009. "The public health costs of job loss," Journal of Health Economics, Elsevier, vol. 28(6), pages 1099-1115, December.
    15. Warr, Peter & Jackson, Paul, 1987. "Adapting to the unemployed role: A longitudinal investigation," Social Science & Medicine, Elsevier, vol. 25(11), pages 1219-1224, January.
    16. David M. Cutler & Adriana Lleras-Muney, 2006. "Education and Health: Evaluating Theories and Evidence," NBER Working Papers 12352, National Bureau of Economic Research, Inc.
    17. Guido W. Imbens & Charles F. Manski, 2004. "Confidence Intervals for Partially Identified Parameters," Econometrica, Econometric Society, vol. 72(6), pages 1845-1857, November.
    18. Michael Gerfin & Martin Schellhorn, 2006. "Nonparametric bounds on the effect of deductibles in health care insurance on doctor visits - Swiss evidence," Health Economics, John Wiley & Sons, Ltd., vol. 15(9), pages 1011-1020.
    19. Daniel Sullivan & Till von Wachter, 2009. "Job Displacement and Mortality: An Analysis Using Administrative Data," The Quarterly Journal of Economics, Oxford University Press, vol. 124(3), pages 1265-1306.
    20. Philippe Aghion & Ufuk Akcigit & Angus Deaton & Alexandra Roulet, 2016. "Creative destruction and subjective well-being," LSE Research Online Documents on Economics 69228, London School of Economics and Political Science, LSE Library.
    21. Charles F. Manski & John V. Pepper, 2000. "Monotone Instrumental Variables, with an Application to the Returns to Schooling," Econometrica, Econometric Society, vol. 68(4), pages 997-1012, July.
    22. Goldsmith, Arthur H. & Veum, Jonathan R. & William Darity, Jr., 1996. "The impact of labor force history on self-esteem and its component parts, anxiety, alienation and depression," Journal of Economic Psychology, Elsevier, vol. 17(2), pages 183-220, April.
    23. Ezzy, Douglas, 1993. "Unemployment and mental health: A critical review," Social Science & Medicine, Elsevier, vol. 37(1), pages 41-52, July.
    24. Charles F. Manski & John V. Pepper, 2009. "More on monotone instrumental variables," Econometrics Journal, Royal Economic Society, vol. 12(s1), pages 200-216, 01.
    25. John V. Pepper, 2000. "The Intergenerational Transmission Of Welfare Receipt: A Nonparametric Bounds Analysis," The Review of Economics and Statistics, MIT Press, vol. 82(3), pages 472-488, August.
    26. Charles F. Manski, 1989. "Anatomy of the Selection Problem," Journal of Human Resources, University of Wisconsin Press, vol. 24(3), pages 343-360.
    27. Ruhm, Christopher J, 1991. "Are Workers Permanently Scarred by Job Displacements?," American Economic Review, American Economic Association, vol. 81(1), pages 319-324, March.
    28. Philippe Aghion & Ufuk Akcigit & Angus Deaton & Alexandra Roulet, 2016. "Creative Destruction and Subjective Well-Being," American Economic Review, American Economic Association, vol. 106(12), pages 3869-3897, December.
    29. Schmitz, Hendrik, 2011. "Why are the unemployed in worse health? The causal effect of unemployment on health," Labour Economics, Elsevier, vol. 18(1), pages 71-78, January.
    30. Petri Böckerman & Pekka Ilmakunnas, 2009. "Unemployment and self-assessed health: evidence from panel data," Health Economics, John Wiley & Sons, Ltd., vol. 18(2), pages 161-179.
    31. Daniel S. Hamermesh, 2000. "The Craft of Labormetrics," ILR Review, Cornell University, ILR School, vol. 53(3), pages 363-380, April.
    32. Salm, M., 2009. "Does job loss cause ill health?," Other publications TiSEM 314436db-9957-4912-ba47-9, Tilburg University, School of Economics and Management.
    33. Monique de Haan, 2011. "The Effect of Parents' Schooling on Child's Schooling: A Nonparametric Bounds Analysis," Journal of Labor Economics, University of Chicago Press, vol. 29(4), pages 859-892.
    34. Green, Francis, 2011. "Unpacking the misery multiplier: How employability modifies the impacts of unemployment and job insecurity on life satisfaction and mental health," Journal of Health Economics, Elsevier, vol. 30(2), pages 265-276, March.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp10652. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.