Self-Reported Mental Health and the Demand for Mental Health Care After a Labor Market Shock: Evidence from the Spanish Great Recession
-
Eduardo Ignacio Polo-Muro
Abstract
This research examines the mental health inequalities between employed and unemployed individuals among the fluctuations over the business cycle. To analyze whether a recession affects self-evaluated mental health and consequently increases the demand for mental health care, I exploit the sudden increase of the unemployment rate in Spain during the period 2007–2009. First, I analyze the impairment of self-evaluated mental health as a consequence of the Great Recession and if it prevails during the economic recovery. In addition, I estimate if the effect on self-reported mental health is reflected in demand for mental health care. The results from an event study design show that the economic downturn increases the differences between employed and unemployed individuals in self-evaluated mental health. However, and despite the continuous improvement in unemployment, the mental health gap remained unchanged between 2014 and 2017, which could imply the persistence of some lasting impacts of the Great Recession on mental health. Nonetheless, I find a reduction in the differences of using drugs related to mental health during the period 2011–2012, when I estimate the largest inequalities in self-evaluated mental health.
Funding source: Eusko Jaurlaritza
Award Identifier / Grant number: (POS-2021-1-0030), IT1336-19, PRE-2016-1-0429, IT 1461-22
Funding source: Consejería de Economía, Conocimiento, Empresas y Universidad, Junta de Andalucía
Award Identifier / Grant number: P18-RT-2135
Acknowledgments
The author thank Carlos Dobkin, George Bulman, Javier Gardeazabal, David Martinez-Miera, and participants at the 24th Associazione Italiana di Economia Sanitaria held at Scuola Universitaria Superiore Pisa, 3-4 October, 2019, 1st PhD Workshop on Empirical Economics held at Free University of Bolzano, October 18-19, 2019, and Annual Meeting of the Association of Southern European Economic Theorist held at Athens University of Economics and Business, 25-27 October, 2019 for their comments. The author also would like to thank the Department of Economics at the University of California San Diego for its hospitality while part of this work was carried out.
-
Research funding: The author acknowledges financial support from the Eusko Jaurlaritza (POS-2021-1-0030, IT 1336-19, IT 1461-22), and Junta de Andalucia (P18-RT-2135).
References
Abadie, A., and G. W. Imbens. 2011. “Bias-Corrected Matching Estimators for Average Treatment Effects.” Journal of Business & Economic Statistics 29 (1): 1–11. https://doi.org/10.1198/jbes.2009.07333.Search in Google Scholar
Andersen, T. M., and M. Svarer. 2010. “Business Cycle Dependent Unemployment Insurance.” IZA Discussion Paper No. 5196.10.2139/ssrn.1686487Search in Google Scholar
Apouey, B., and A. E. Clark. 2014. “Winning Big But Feeling No Better? The Effect of Lottery Prizes on Physical and Mental Health.” Health Economics 24 (5): 516–38. https://doi.org/10.1002/hec.3035.Search in Google Scholar
Avdic, D., S. C. de New, and D. A. Kamhöfer. 2021. “Economic Downturns and Mental Health in Germany.” European Economic Review 140: 103915. https://doi.org/10.1016/j.euroecorev.2021.103915.Search in Google Scholar
Baird, S., J. de Hoop, and B. Özler. 2013. “Income Shocks and Adolescent Mental Health.” Journal of Human Resources 48 (2): 370–403. https://doi.org/10.3368/jhr.48.2.370.Search in Google Scholar
Bangham, G. 2019. Happy Now? Lessons for Economic Policy Makers from a Focus on Subjective Well-Being. Technical Report. Resolution Foundation. https://www.resolutionfoundation.org/publications/happy-now-lessons-for-economic-policy-makers-from-a-focus-on-subjective-well-being/.Search in Google Scholar
Bartoll, X., J. Gil, and R. Ramos. 2019. “Has the Economic Crisis Worsened the Work-Related Stress and Mental Health of Temporary Workers in Spain? IZA Discussion Papers.” International Archives of Occupational and Environmental Health 92 (7): 1047–59. https://doi.org/10.1007/s00420-019-01443-2.Search in Google Scholar
Bell, D. N., and D. G. Blanchflower. 2019. “The Well-Being of the Overemployed and the Underemployed and the Rise in Depression in the UK.” Journal of Economic Behavior Organization 161 180–96.10.1016/j.jebo.2019.03.018Search in Google Scholar
Bertheau, A., E. M. Acabbi, C. Barcelo, A. Gulyas, S. Lombardi, and R. Saggio. 2022. The Unequal Consequences of Job Loss Across Countries. Working Paper 29727, National Bureau of Economic Research.10.3386/w29727Search in Google Scholar
Bharadwaj, P., M. M. Pai, and A. Suziedelyte. 2017. “Mental Health Stigma.” Economics Letters 159: 57–60. https://doi.org/10.1016/j.econlet.2017.06.028.Search in Google Scholar
Biasi, B., M. S. Dahl, and P. Moser. 2018. Career Effects on Mental Health. https://ssrn.com/abstract=2544251 or https://doi.org/10.2139/ssrn.2544251.Search in Google Scholar
Boyce, C. J., L. Delaney, and A. M. Wood. 2018. “The Great Recession and Subjective Well-Being: How Did the Life Satisfaction of People Living in the United Kingdom Change Following the Financial Crisis?” PLoS One 13 (8): 1–17. https://doi.org/10.1371/journal.pone.0201215.Search in Google Scholar
Bubonya, M., D. A. Cobb-Clark, and D. C. Ribar. 2018. The Bilateral Relationship Between Depressive Symptoms and Employment Status. Life Course Centre Working Paper Series N 2017-07. https://www.lifecoursecentre.org.au/wp-content/uploads/2018/06/2017-07-Updated.pdf.10.2139/ssrn.2949069Search in Google Scholar
Charles, K. K., and P. DeCicca. 2008. “Local Labor Market Fluctuations and Health: Is There a Connection and for Whom?” Journal of Health Economics 27 (6): 1532–50. https://doi.org/10.1016/j.jhealeco.2008.06.004.Search in Google Scholar
Clark, A. E. 2003. “Unemployment as a Social Norm: Psychological Evidence from Panel Data.” Journal of Labor Economics 21 (2): 323–51. https://doi.org/10.1086/345560.Search in Google Scholar
Cygan-Rehm, K., D. Kuehnle, and M. Oberfichtner. 2017. “Bounding the Causal Effect of Unemployment on Mental Health: Nonparametric Evidence from Four Countries.” Health Economics 26 (12): 1844–61. https://doi.org/10.1002/hec.3510.Search in Google Scholar
Drydakis, N. 2015. “The Effect of Unemployment on Self-Reported Health and Mental Health in greece from 2008 to 2013: A Longitudinal Study Before and During the Financial Crisis.” Social Science & Medicine 128: 43–51. https://doi.org/10.1016/j.socscimed.2014.12.025.Search in Google Scholar
Farré, L., F. Fasani, and H. Mueller. 2018. “Feeling Useless: The Effect of Unemployment on Mental Health in the Great Recession.” IZA Journal of Labor Economics 7 (1): 8. https://doi.org/10.1186/s40172-018-0068-5.Search in Google Scholar
Ferrer-i Carbonell, A. 2005. “Income and Well-Being: An Empirical Analysis of the Comparison Income Effect.” Journal of Public Economics 89 (5): 997–1019. https://doi.org/10.1016/j.jpubeco.2004.06.003.Search in Google Scholar
Frijters, P., D. W. Johnston, and M. A. Shields. 2014. “The Effect of Mental Health on Employment: Evidence from Australian Panel Data.” Health Economics 23 (9): 1058–71. https://doi.org/10.1002/hec.3083.Search in Google Scholar
Gangopadhyaya, A., F. Blavin, J. Gates, and B. Braga. 2020. “Credit Where It’s Due: Investigating Pathways from Eitc Expansion to Maternal Mental Health.” Health Economics 29 (9): 975–91.10.1002/hec.4034Search in Google Scholar
Gardeazabal, J., and E. Polo-Muro. 2021. “Cultural Expenditure of Those Who Enter (Or Exit) Unemployment.” Journal of Cultural Economics 46: 571–96. https://doi.org/10.1007/s10824-021-09423-6.Search in Google Scholar
Gili, M., M. Roca, S. Basu, M. McKee, and D. Stuckler. 2012. “The Mental Health Risks of Economic Crisis in Spain: Evidence from Primary Care Centres, 2006 and 2010.” European Journal of Public Health 23 (1): 103–8. https://doi.org/10.1093/eurpub/cks035.Search in Google Scholar
Goldberg, D. P., and V. F. Hillier. 1979. “A Scaled Version of the General Health Questionnaire.” Psychological Medicine 9 (1): 139–45. https://doi.org/10.1017/s0033291700021644.Search in Google Scholar
Goldberg, D., and P. Williams. 1988. A Userís Guide to the General Health Questionnaire. Windsor: NFER-Nelson.Search in Google Scholar
Hoynes, H. W., and J. Rothstein. 2019. Universal Basic Income in the US and Advanced Countries. Working Paper 25538, National Bureau of Economic Research. https://www.nber.org/papers/w25538.10.3386/w25538Search in Google Scholar
Johnston, D. W., M. A. Shields, and A. Suziedelyte. 2020. “Macroeconomic Shocks, Job Security, and Health: Evidence from the Mining Industry.” American Journal of Health Economics 6 (3): 348–71. https://doi.org/10.1086/708929.Search in Google Scholar
Kuka, E. 2020. “Quantifying the Benefits of Social Insurance: Unemployment Insurance and Health.” The Review of Economics and Statistics 102 (3): 490–505. https://doi.org/10.1162/rest_a_00865.Search in Google Scholar
Lachowska, M. 2017. “The Effect of Income on Subjective Well-Being: Evidence from the 2008 Economic Stimulus Tax Rebates.” Journal of Human Resources 52 (2): 374–417. https://doi.org/10.3368/jhr.52.2.1014-6727r1.Search in Google Scholar
Lindqvist, E., R. Östling, and D. Cesarini. 2020. “Long-Run Effects of Lottery Wealth on Psychological Well-Being.” The Review of Economic Studies 87 (6): 2703–26.10.1093/restud/rdaa006Search in Google Scholar
Luttmer, E. F. P. 2005. “Neighbors as Negatives: Relative Earnings and Well-Being*.” The Quarterly Journal of Economics 120 (3): 963–1002. https://doi.org/10.1162/003355305774268255.Search in Google Scholar
Marcus, J. 2013. “The Effect of Unemployment on the Mental Health of Spouses – Evidence from Plant Closures in Germany.” Journal of Health Economics 32 (3): 546–58. https://doi.org/10.1016/j.jhealeco.2013.02.004.Search in Google Scholar
Martínez-Jiménez, M., and J. Vall Castelló. 2020. “Effects of Macroeconomic Fluctuations on Mental Health and Psychotropic Medicine Consumption.” International Journal of Health Economics and Management 20 (3): 277–97. https://doi.org/10.1007/s10754-020-09281-3.Search in Google Scholar
Moscone, F., E. Tosetti, and G. Vittadini. 2016. “The Impact of Precarious Employment on Mental Health: The Case of Italy.” Social Science & Medicine 158: 86–95. https://doi.org/10.1016/j.socscimed.2016.03.008.Search in Google Scholar
Mousteri, V., M. Daly, and L. Delaney. 2018. “The Scarring Effect of Unemployment on Psychological Well-Being Across Europe.” Social Science Research 72: 146–69. https://doi.org/10.1016/j.ssresearch.2018.01.007.Search in Google Scholar
Mousteri, V., M. Daly, L. Delaney, P. Tynelius, and F. Rasmussen. 2019. “Adolescent Mental Health and Unemployment Over the Lifespan: Population Evidence from Sweden.” Social Science & Medicine 222: 305–14. https://doi.org/10.1016/j.socscimed.2018.12.030.Search in Google Scholar
Perez-Truglia, R. 2020. “The Effects of Income Transparency on Well-Being Evidence from a Natural Experiment.” American Economic Review 110: 1019–54.10.3386/w25622Search in Google Scholar
Reichert, A. R., and H. Tauchmann. 2017. “Workforce Reduction, Subjective Job Insecurity, and Mental Health.” Journal of Economic Behavior & Organization 133: 187–212. https://doi.org/10.1016/j.jebo.2016.10.018.Search in Google Scholar
Ridley, M. W., G. Rao, F. Schilbach, and V. H. Patel. 2020. “Poverty, Depression, and Anxiety: Causal Evidence and Mechanisms.” Science 370 (6522): eaay0214.10.1126/science.aay0214Search in Google Scholar
Rothstein, J. 2023. “The Lost Generation? Labor Market Outcomes for Post Great Recession Entrants.” Journal of Human Resources 58 (5): 1452–79.10.3368/jhr.58.5.0920-11206R1Search in Google Scholar
Schaller, J., and A. H. Stevens. 2015. “Short-Run Effects of Job Loss on Health Conditions, Health Insurance, and Health Care Utilization.” Journal of Health Economics 43: 190–203. https://doi.org/10.1016/j.jhealeco.2015.07.003.Search in Google Scholar
Schwandt, H. 2018. “Wealth Shocks and Health Outcomes: Evidence from Stock Market Fluctuations.” American Economic Journal: Applied Economics 10 (4): 349–77. https://doi.org/10.1257/app.20140499.Search in Google Scholar
Stutzer, A., and R. Odermatt. 2018. “(Mis-)Predicted Subjective Well-Being Following Life Events.” Journal of the European Economic Association 17 (1): 245–83. https://doi.org/10.1093/jeea/jvy005.Search in Google Scholar
Tefft, N. 2011. “Insights on Unemployment, Unemployment Insurance, and Mental Health.” Journal of Health Economics 30 (2): 258–64. https://doi.org/10.1016/j.jhealeco.2011.01.006.Search in Google Scholar
Urbanos-Garrido, R. M., and B. G. Lopez-Valcarcel. 2015. “The Influence of the Economic Crisis on the Association Between Unemployment and Health: An Empirical Analysis for Spain.” The European Journal of Health Economics 16 (2): 175–84. https://doi.org/10.1007/s10198-014-0563-y.Search in Google Scholar
Wang, Y., and G. Fattore. 2020. “The Impact of the Great Economic Crisis on Mental Health Care in Italy.” The European Journal of Health Economics 21 (8): 1259–72. https://doi.org/10.1007/s10198-020-01204-w.Search in Google Scholar
Wang, H., C. Wang, and T. J. Halliday. 2018. “Health and Health Inequality During the Great Recession: Evidence from the Psid.” Economics & Human Biology 29: 17–30. https://doi.org/10.1016/j.ehb.2018.01.001.Search in Google Scholar
Yagan, D. 2019. “Employment Hysteresis from the Great Recession.” Journal of Political Economy 127 (5): 2505–58. https://doi.org/10.1086/701809.Search in Google Scholar
© 2023 Walter de Gruyter GmbH, Berlin/Boston
