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Feeling Useless: The Effect of Unemployment on Mental Health in the Great Recession

Author

Listed:
  • Farré, Lídia

    () (University of Barcelona)

  • Fasani, Francesco

    () (Queen Mary, University of London)

  • Mueller, Hannes

    () (IAE Barcelona (CSIC))

Abstract

This article documents a strong connection between unemployment and mental disorders using data from the Spanish Health Survey. We exploit the collapse of the construction sector to identify the causal effect of job loss. Our results suggest that an increase of the unemployment rate by 10 percent due to collapse of the sector raised mental disorders in the affected population by 3 percent. We argue that the large size of this effect responds to the fact that the construction sector was at the centre of the macroeconomic shock. As a result, workers exposed to the negative employment shock faced very low chances of re-entering employment. We show that this led to long unemployment spells, hopelessness and feelings of uselessness.

Suggested Citation

  • Farré, Lídia & Fasani, Francesco & Mueller, Hannes, 2015. "Feeling Useless: The Effect of Unemployment on Mental Health in the Great Recession," IZA Discussion Papers 9235, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp9235
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    Cited by:

    1. Italo Colantone & Rosario Crinò & Laura Ogliari, 2015. "The Hidden Cost of Globalization: Import Competition and Mental Distress," BAFFI CAREFIN Working Papers 1511, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    2. Samuel Bentolila & J. Ignacio García-Pérez & Marcel Jansen, 2017. "Are the Spanish long-term unemployed unemployable?," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 8(1), pages 1-41, March.
    3. Jonathan de Quidt & Johannes Haushofer, 2016. "Depression for Economists," NBER Working Papers 22973, National Bureau of Economic Research, Inc.
    4. repec:dem:demres:v:40:y:2019:i:47 is not listed on IDEAS
    5. Victoria Baranov & Sonia Bhalotra & Pietro Biroli & Joanna Maselko, 2017. "Maternal Depression, Women’s Empowerment, and Parental Investment: Evidence from a Large Randomized Control Trial," CHILD Working Papers Series 60 JEL Classification: I1, Centre for Household, Income, Labour and Demographic Economics (CHILD) - CCA.
    6. Lee, Y-W.;, 2019. "Effects of Parental Job Loss and Insecurity on Children’s Health: Evidence from Korea," Health, Econometrics and Data Group (HEDG) Working Papers 19/09, HEDG, c/o Department of Economics, University of York.
    7. repec:eee:inecon:v:119:y:2019:i:c:p:181-207 is not listed on IDEAS
    8. Jonathan de Quidt & Johannes Haushofer, 2017. "Depression through the Lens of Economics: A Research Agenda," NBER Chapters, in: The Economics of Poverty Traps, pages 127-152, National Bureau of Economic Research, Inc.
    9. repec:zbw:espost:200400 is not listed on IDEAS
    10. repec:spr:jopoec:v:32:y:2019:i:1:d:10.1007_s00148-018-0696-x is not listed on IDEAS
    11. Barone, Adriana & Barra, Cristian, 2019. "Weight status and mental health in Italy: Evidence from EHIS2 microdata," MPRA Paper 96703, University Library of Munich, Germany.
    12. Alloush, M., 2018. "Income, Psychological Well-being, and the Dynamics of Poverty: Evidence from South Africa," 2018 Annual Meeting, August 5-7, Washington, D.C. 274223, Agricultural and Applied Economics Association.
    13. Victoria Baranov & Sonia Bhalotra & Pietro Biroli & Joanna Maselko, 2018. "Maternal Depression, Women’s Empowerment, and Parental Investment: Evidence from a Randomized Control Trial," Working Papers 2018-021, Human Capital and Economic Opportunity Working Group.
    14. Olivier Bargain & Laurine Martinoty, 2019. "Crisis at home: mancession-induced change in intrahousehold distribution," Journal of Population Economics, Springer;European Society for Population Economics, vol. 32(1), pages 277-308, January.
    15. Baranov, Victoria & Bhalotra, Sonia R. & Biroli, Pietro & Maselko, Joanna, 2017. "Maternal Depression, Women's Empowerment, and Parental Investment: Evidence from a Large Randomized Control Trial," IZA Discussion Papers 11187, Institute of Labor Economics (IZA).
    16. Samuel Bentolila & J. Ignacio García-Pérez & Marcel Jansen, 2017. "Are the Spanish long-term unemployed unemployable?," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 8(1), pages 1-41, March.

    More about this item

    Keywords

    mental health; great recession; unemployment; Spain;

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation

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