Economic downturns and mental health in Germany

Daniel Avdic (), Sonja de New and Daniel Kamhofer

European Economic Review, 2021, vol. 140, issue C

Abstract: We study the impact of the macroeconomic environment on mental health in Germany. Endogeneity concerns are tackled using a shift-share instrumental variables approach in which exposure to macroeconomic fluctuations is estimated from regional variations in historical industry sector composition. Estimation results reveal strong procyclical effects on the 12-item short form survey’s mental health component summary score. These results are supported by corresponding estimates for self-assessed life satisfaction and objective mental health-related hospitalizations. Effects mainly operate through worries about future job loss and income reductions, while actual unemployment and income effects are small. An event study of the impact of the Great Recession reveals that adverse effects on mental health are persistent and remained even after the economy recovered.

Keywords: Business cycle; Mental health; Well-being; Great Recession; Shift-share instrument (search for similar items in EconPapers)
JEL-codes: E32 I15 J64 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S001429212100221X
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:140:y:2021:i:c:s001429212100221x

DOI: 10.1016/j.euroecorev.2021.103915

Access Statistics for this article

European Economic Review is currently edited by T.S. Eicher, A. Imrohoroglu, E. Leeper, J. Oechssler and M. Pesendorfer

More articles in European Economic Review from Elsevier
Bibliographic data for series maintained by Catherine Liu ().