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

Lidia Farre (), Francesco Fasani and Hannes Mueller

No 838, Working Papers from Barcelona Graduate School of Economics

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 center 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.

Keywords: unemployment; mental health; great recession; Spain; construction; suicide (search for similar items in EconPapers)
JEL-codes: C26 J60 I10 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eur, nep-hea and nep-lab
Date: 2015-07
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Related works:
Journal Article: Feeling useless: the effect of unemployment on mental health in the Great Recession (2018) Downloads
Working Paper: Feeling Useless: The Effect of Unemployment on Mental Health in the Great Recession (2018) Downloads
Working Paper: Feeling Useless: The Effect of Unemployment on Mental Health in the Great Recession (2015) Downloads
Working Paper: Feeling Useless: The Effect of Unemployment on Mental Health in the Great Recession (2015) Downloads
Working Paper: Feeling Useless: The Effect of Unemployment on Mental Health in the Great Recession (2015) Downloads
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