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

Lidia Farre, Francesco Fasani and Hannes Mueller

No 9235, IZA Discussion Papers from Institute of Labor Economics (IZA)

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.

Keywords: mental health; great recession; unemployment; Spain (search for similar items in EconPapers)
JEL-codes: C26 I10 J60 (search for similar items in EconPapers)
Pages: 50 pages
Date: 2015-07
New Economics Papers: this item is included in nep-eur, nep-hea, nep-lab and nep-ltv
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

Published - published in: IZA Journal of Labor Economics (2018) 7(1), 1-34

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Related works:
Journal Article: Feeling useless: the effect of unemployment on mental health in the Great Recession (2018)
Working Paper: Feeling Useless: The Effect of Unemployment on Mental Health in the Great Recession (2018)
Working Paper: Feeling Useless: The Effect of Unemployment on Mental Health in the Great Recession (2015)
Working Paper: Feeling Useless: The Effect of Unemployment on Mental Health in the Great Recession (2015)
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