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The effect of unemployment on the mental health of spouses - Evidence from plant closures in Germany
Abstract
Studies on health effects of unemployment usually neglect spillover effects on spouses. This study specifically investigates the effect of an individual's unemployment on the mental health of their spouse. In order to allow for causal interpretation of the estimates, it focuses on plant closure as entry into unemployment, and combines difference-in-difference and matching based on entropy balancing to provide robustness against observable and time-invariant unobservable heterogeneity. Using German Socio-Economic Panel Study data the paper reveals that unemployment decreases the mental health of spouses almost as much as for the directly affected individuals. The findings highlight that previous studies underestimate the public health costs of unemployment as they do not account for the potential consequences for spouses.
... We used the Mental Component Summary (MCS) and Physical Component Summary (PCS) scales as outcome variables (Ware, Kosinki, and Dewey 2000). These measures are widely employed in the economic and psychological literature and nowadays represent a standard in those studies seeking to measure the health effects of unemployment (Marcus 2013;Neubert et al. 2019;Schmitz 2011;Stauder 2019). They are provided by the SOEP version of the Short Form Health Survey (SF-12v2) questionnaire, which is the shorter and more practical version of the 36-items Short-Form Health Survey . ...
... This reduction may offset (or at least partially hinder) the parental ability to invest in educational and health goods for the child Tomes 1979, 1986;Grossman 1972). Unemployment also causes emotional distress, that in turn may lead to family breaks (Di Nallo et al. 2022;Eliason 2012;Jensen and Smith 1990;Marcus 2013;Mörk, Sjögren, and Svaleryd 2020). Disrupted family structures represent inhospitable environments for the child development. ...
... Higher scores indicate better health. The two variables were proved to be valid and reliable measures of the current general health status compared to other scales (Gill et al. 2007) and are widely used in the economic and psychological literature (Marcus 2013;Neubert et al. 2019;Schmitz 2011;Stauder 2019). 11 Table 2 reports their summary statistics and Figure A.1 in the Online Appendix plots the density distributions of the outcome variables distinguishing between treated and control units. ...
This paper studies whether individuals that experienced parental unemployment during their childhood/early adolescence have poorer health once they reach the adulthood. We used data from the German Socio-Economic Panel from 2002 until 2018. Our identification strategy of the causal effect of parental unemployment relied on plant closures as exogenous variation of the individual labor market condition. We combined matching methods and parametric estimation to strengthen the causal interpretation of the estimates. On the one hand, we found a nil effect for parental unemployment on mental health. On the other hand, we detected a negative effect on physical health, which is stronger if parental unemployment occurred in late periods of the childhood and heterogeneous across gender. The negative effect of parental unemployment on physical health may be explained by a higher alcohol and tobacco consumption later in life.
... While opportunity self-employed usually display higher family and health satisfaction than necessity self-employed, both types of self-employed have been found to be equally dissatisfied with the lack of leisure time (Binder & Coad, 2016). Nikolova (2019) suggests the necessity self-employed experience improvements in their mental health: necessity-based self-employment could provide not only a livelihood but also well-being gains to those who escape the misery of joblessness, which has been found to affect spouses almost as strongly as the directly affected (Marcus, 2013). Opportunity-based self-employment may improve well-being if it brings autonomy and flexibility. ...
... This ensures that the control S. M. Alshibani et al. sample matches the treatment sample as closely as possible, in order to avoid comparability issues arising from selection bias. This quasi-experimental method is frequently used to emulate a randomised controlled trial design applied to survey data, as seen in Freier et al. (2015), Marcus (2013), and Nikolova (2019). 3 We apply a matching strategy for the treatment and control samples in order to facilitate meaningful comparison and avoid selection bias. ...
... Proceeding with the entropy balancing and following the identification strategy of Freier et al. (2015), Marcus (2013), and Nikolova (2019), we classify seven 2-year treatment periods from 2002 to 2016. In each period, individuals are placed in the treatment category if their spouse made the transition into self-employment. ...
Plain English Summary
If contemplating self-employment, consider your spouse: Spouses of the self-employed report reduced psychological well-being following transition into self-employment. However, they report improved well-being if transitioning from unemployment. We compare the psychological well-being of spouses of individuals who enter self-employment with comparable others before and after transition. Spouses of self-employed individuals report substantially higher levels of well-being before entry into self-employment and a modest decrease in well-being following entry. This is consistent with the hypothesis that self-employment demands substantial psychological capital from spouses. These patterns hold for both genders, with only moderate gender differences identified. In contrast, spouses of those entering self-employment from unemployment report improvements in well-being.
Our results suggest would-be entrepreneurs should recognise the impact this may have on their spouses. Policymakers should and recognise the important role held by spouses and consider improving access to support services to assist the self-employed and their families.
... The consequences of mass redundancies are often severe and can leave long-lasting scars that impede the career development and well-being of affected workers. Possible negative outcomes encompass periods of unemployment and income reductions upon re-employment (Jolkkonen et al. 2012;Oesch and Baumann 2015), decreased job quality (Brand 2006), a decline in subjective well-being (Kassenboehmer and Haisken-DeNew 2009), resulting in reduced life satisfaction for both the affected workers and their spouses in cases of unemployment (Nikolova and Ayhan 2018), as well as adverse effects on mental (Mendolia 2014;Marcus 2013) and physical health (Gallo et al. 2000). The negative consequences of plant closures can persist throughout careers (Eliason and Storrie 2006), but not all affected workers experience their job loss as equally adverse. ...
... A growing number of studies describe the negative consequences of plant closures and mass layoffs. Individuals may face a reduction or lack of income (Oesch and Baumann 2015), a decrease in job quality following re-employment (Brand 2006;Farber 2017), a decline of psychological (Marcus 2013;Mendolia 2014;Andreeva et al. 2015) and physical health (Gallo et al. 2000), including an increased risk of mortality (Sullivan and von Wachter 2009), as well as a decrease in life satisfaction (Kassenboehmer and Haisken-DeNew 2009;Nikolova and Ayhan 2018). However, the majority of these studies focus on short-to mid-term consequences. ...
This study examines which factors influence the long-term subjective career success of industrial workers, who experienced mass redundancy during the Great Recession. We used two tailor-made surveys to analyze how workers assess the impact of plant closure on their subjective career success. Higher educational attainment and a more internal locus of control correlate with a more positive assessment of post-redundancy career success. We also observe differences in workers’ evaluations due to differing plant closure modalities on the meso-level.
... Second, since use of the internet was often necessary for mandatory homeschooling, families with poor internet access may have experienced greater mental health harm [20,21]. Finally, preand peri-pandemic research has linked parental unemployment to adverse mental health effects in families, which may point to parent unemployment as another risk factor during mandatory homeschooling [4,[22][23][24]. ...
... Findings are mixed regarding the effects of parent employment on family mental health during COVID-19. Pre-pandemic research has linked self-or spousal unemployment to stress, anxiety and depression in adults [23,46,47]. Some pre-pandemic studies have linked parental unemployment to poorer mental health outcomes for children due to family financial strain and reduced parental well-being [24], while others have found beneficial impacts on younger children due to increased availability of parent-child quality time [48]. ...
Background/Objectives: Most studies have linked mandatory homeschooling during COVID-19 to mental health harm in parents and children, while a minority have found non-significant or beneficial effects. Past studies have not measured mandatory homeschooling continuously over an extended period; consequently, they could not capture compounding mental health effects, which may explain conflicting results. We asked whether children’s cumulative time spent homeschooled during COVID-19 school closure mandates caused compounding harm for parent and child mental health, and whether parent employment, child internet access and educational support from schools (live and pre-recorded online classes, home learning packs) impacted this relationship. We aimed to identify the families at greatest risk of mental health harm during mandatory homeschooling and the educational support that may have mitigated this risk. Methods: Couples completed retrospective, cross-sectional survey questionnaires assessing parent depression, anxiety and stress, child internalizing and externalizing symptoms, and the family’s homeschooling experience. Data were analyzed using mediation analysis total effects, ordinary least squares regression and simple slopes analysis. Results: Both parents and children experienced compounding mental health harm during mandatory homeschooling. Live online classes protected parents and children, while home learning packs protected children. Unexpectedly, reliable internet access and the employment of both parents placed children at greater risk. Conclusions: Findings suggest that long-term mandatory homeschooling during COVID-19 placed families at greater risk of mental health harm. To protect family mental health during homeschooling mandates, schools should provide children with evidence-based educational support.
... Further direct effects of unemployment will be introduced at a later stage within this chapter. In romantic relationships, people can be affected by their partners' stress and strain due to spillover and crossover effects (Bünnings et al., 2017;Marcus, 2013). A spillover effect is described as an intraindividual transmission of emotions between two domains (e.g., work domain and home domain; Demerouti et al., 2005). ...
... As thoroughly discussed in the theory section, unemployment is associated not only with a decline in life satisfaction but also with a range of (mental) health indicators that may lead to high financial costs for the German health care system (Weber et al., 2007). Additionally, interindividual transmission of life satisfaction and depressive symptoms between partners (Westman & Vinokur, 1998) as well as a similar negative impact on mental health for both partners (Marcus, 2013) have been observed. Therefore, aspects of mental health of the indirectly affected partner must also be considered. ...
... CHARLS selected two provinces in China to conduct a pre-survey in 2008. In 2011, 2013, 2015 and 2018, it conducted four rounds of surveys in 450 communities (villages) in 150 counties of 28 provinces. Four rounds of surveys were carried out, of which 2011 was the baseline sample. ...
... The effect of retirement on whether an individual feels lonely or not is not significant, but the signs of the estimates again suggest women enjoy retirement more than men. These results are consistent with existing studies (see Marcus, 2013) that retirement negatively affects men's emotions more, and it can adversely impact the health of their spouses through the mechanism of emotional contagion between couples. ...
This paper empirically studies the causal effect of retirement on spouses’ subjective health for the elderly in urban China. We find that women’s retirement positively affects their husbands, while husbands’ retirement tends to affect wives negatively. The difference in post-retirement healthy (and unhealthy) behaviors and emotions between men and women can explain gender asymmetry. Men tend to have a negative state of mind and unhealthy habits and behaviors more than women, which results in the negative spillover effect. We also estimate the marginal threshold treatment effect (MTTE), showing that a small delay of statutory retirement age is beneficial for improving overall subjective health, yet the conclusion would actually be the opposite if the spillover effect were to be ignored. These results provide useful references for the current discussion on retirement policy reform in China.
... Además, aquellos trabajadores que no cuenta con ninguna seguridad laboral ni social experimentan sentimientos de incertidumbre (Guadarrama Olivera et al., 2012). Todo lo anterior, ha concitado el interés de la comunidad científica por realizar investigaciones que se concentran en indagar en la incertidumbre laboral (Browning & Hinesen, 2012;Deb et al., 2011;Marcus, 2012). ...
Currently, people who are part of the workforce experience uncertainty about their jobs due to different social and technological situations, which can generate other conditions in areas such as health, economics, among others. However, to conduct research focused on this problem, it is necessary to have appropriate instruments for the execution of these scientific studies. This study aimed to evaluate whether the Job Insecurity Scale has adequate psychometric properties in a multi-occupational sample of Salvadoran workers. A total of 170 questionnaires were obtained through non probabilistic snowball sampling. The mean age of participants was 36 years, with a standard deviation of 11. The participants were mostly women (60%), from urban areas (84.1%), completed university studies (42.4%),and from the private labor sector (51.8%). The results showed that the scale has adequate psychometric properties for construct validity; however, item 4 does not have an acceptable factorial saturation. In addition, the instrument has adequate validity coefficients based on the relationships between the variables. With respect to reliability, the scale reached satisfactory levels (>.80, excluding Item 4). It was concluded that the Labor Uncertainty Scale is a valid and reliable instrument for use in Salvadoran research that focuses on this social phenomenon.
... et al. 2018;Wheatley, 2017). Additionally, a substantial body of couple-level studies on the correlation between employment and satisfaction has been concentrated on the dyadic effects of couples' unemployment on satisfaction (Knabe et al. 2016;Luhmann et al. 2014;Marcus, 2013). ...
Despite ample research on the association between the availability of flexible working arrangements (FWAs) and satisfaction from an individual perspective, little has explored the dyadic correlation between the availability of FWAs and satisfaction with work-life flexibility (WLF) from a couple-level perspective among working parents. Drawing on a linked lives perspective and the work-family border theory, this study contributes to the literature by adopting the longitudinal couple-level dyadic data from the Household, Income, and Labour Dynamics in Australia (HILDA) survey (2001–2021) to examine how couples’ availability of FWAs affects their own and their spouses’ satisfaction with WLF among working parents. The results show that among couples with children, mothers’ availability of FWAs significantly improves their own and their husbands’ satisfaction with WLF. In contrast, fathers’ access to FWAs only improves their own satisfaction with WLF. Moreover, the impact of one’s availability of FWAs on their satisfaction with WLF, as well as the effects of mothers’ availability of FWAs on their husbands’ satisfaction, are more pronounced among formal contract workers. Overall, this study underscores the dyadic association between couples’ FWAs and satisfaction with WLF among working parents, delineating an asymmetric dynamic.
... Studies have shown that sudden income shock affects spousal relationships (Charles & Stephens, 2004;Schaller, 2013). Strained relationship is associated with poor mental health (Marcus, 2013). ...
Nigeria has witnessed a growing trend of inflation in recent times. The inflation was aggravated by the removal of fuel subsidy during the second quarter of 2023. Prices of goods and services including food and healthcare skyrocketed. Niger state, being one of the states in the country with high number of fixed-income earners, notably civil servants, might be worst hit by the trend. However, despite having poor health insurance schemes, there is little knowledge about the derivers of demand for healthcare among fixed-income earners in the state and how the coping strategies adopted by the fixe-income earners during inflation might affect the health of their children. This study uses a sample of 1140 fixed income earners across the state and applied descriptive statistics, logistic regression and ordered logit models to analyze the data. The study categorized the inflationary period into three webs. The descriptive result shows that during the first web, most of the fixed-income earners borrowed, solicited for assistance from friends and relatives, or sold their assets to meet up with their health needs. During the second web, most of the respondents reported neglecting health for food, by skipping medications, patronizing quack medical centers or resorting to traditional medical options. In the third web, the result indicated that health behaviors in the previous web persist and in addition, a proximate determinant of health, such as food was undermined. The result of the logistic regression shows that demand for healthcare among the study group is influenced by medical cost, income, low cost of alternative medication, insurance cover, episode of sickness and inflationary web. The result of the ordered logit regression revealed that opting for alternative medication and reducing food quality reduce the quality of health of the children under study, but older children and those without history of poor physical health are absolved. The study suggests that government should provide emergency support to the affected families, strengthen the insurance industry and review the salaries of civil servants to enable them cope with the new economic realities.
... The interpretation in terms of spillovers of mental health rather than spillovers of help-seeking behavior would match well with studies reporting spillover effects in other areas of life. For example, the mental health of partners has been demonstrated to be affected by the other partner's job loss in quasi-experimental studies [40,41]. Disentangling the relative importance of the spread of actual mental health problems versus the spread of mental health awareness, confidence in treatment, and similar factors, is a task for future studies, which might benefit from combining information on help-seeking behavior with mental health assessments that are independent of help-seeking behavior. ...
Purpose
Mental health problems among adolescents have become more prevalent in recent years. Parents’ and siblings’ mental health might be affected by living with a depressed adolescent. This study examines how the mental health of family members develops in the years before and after an adolescent seeks help for depression.
Methods
Unique Norwegian register data that cover the full population are used to estimate models with individual fixed effects. The development in the probability of mental health consultations for parents and older siblings in families with a second-born adolescent seeking help for depression from a GP for the first time is compared to the respective development in families where the second-born adolescent has not had such health care consultation.
Results
Results indicate that adolescents’ depression consultations are associated with a simultaneous increase in mental health consultations in parents and siblings. Mothers and fathers are affected similarly, although the effect seems to be short-lived. Siblings experience a short-term increase in mental health consultations, in addition to a steeper long-term increase across the observation period, compared to peers in families where the second-born adolescent does not seek help for depression. Events that might affect the mental health of multiple family members simultaneously, specifically parental breakup and unemployment, did not explain the observed patterns.
Conclusion
Help-seeking for mental health problems is temporally aligned across family members. Intra- and intergenerational spillovers might contribute to this.
... Additionally, we differentiate between two different types of involuntary job loss: layoff due to plant closure and dismissal. There is an extensive literature on the effects of unexpected job loss focusing solely on individuals affected by plant closures or mass layoffs, as these job loss events are seen as credibly exogenous (e.g., Marcus, 2013;Schmieder et al., 2023). However, as already explained in Section 2.1, we also include dismissals as another type of involuntary job loss. ...
While the existing evidence on added worker effects is mixed, most studies find no or only small effects. However, studies to date have mostly analyzed individuals’ actual labor supply responses to their partners’ job loss, neglecting to consider a potential mismatch between desired and actual labor supply adjustments. Using data from the German Socio-Economic Panel (SOEP), we study individuals’ changes in actual and desired working hours after their partners’ involuntary job loss in an event study design. Our results show that actual and desired working hours only increase marginally and that these increases are of similar magnitude. Thus, we provide first evidence that the absence of more substantial added worker effects is in line with individuals’ stated labor supply preferences and is not the result of an inability to realize desired working hours.
... The first group comprises three commonly used methods in the field of health economics, namely propensity score matching, inverse probability of treatment weighting (IPW), and entropy balancing, all used in combination with a DiD framework. These have been employed in the case of propensity score matching by researchers such as Schreyögg et al. (2011), Fu et al. (2017, Strumpf et al. (2017), Somé et al. (2019), andFlawinne et al. (2023); in the case of IPW by researchers such as Nasseh et al. (2017), Strumpf et al. (2017), Sarma et al. (2018), Urwin et al. (2021), and Bijwaard (2022); and in the case of entropy balancing by Marcus (2013), Somé et al. (2019), Aranda et al. (2021), Bäuml et al. (2023), and Urwin et al. (2023). The second group of approaches consists of the doubly robust methods known as augmented inverse probability weighting (AIPW) and TMLE. ...
Estimating the causal effects of health policy interventions is crucial for policymaking but is challenging when using real‐world administrative health care data due to a lack of methodological guidance. To help fill this gap, we conducted a plasmode simulation using such data from a recent policy initiative launched in a deprived urban area in Germany. Our aim was to evaluate and compare the following methods for estimating causal effects: propensity score matching, inverse probability of treatment weighting, and entropy balancing, all combined with difference‐in‐differences analysis, augmented inverse probability weighting, and targeted maximum likelihood estimation. Additionally, we estimated nuisance parameters using regression models and an ensemble learner called superlearner. We focused on treatment effects related to the number of physician visits, total health care cost, and hospitalization. While each approach has its strengths and weaknesses, our results demonstrate that the superlearner generally worked well for handling nuisance terms in large covariate sets when combined with doubly robust estimation methods to estimate the causal contrast of interest. In contrast, regression‐based nuisance parameter estimation worked best in small covariate sets when combined with singly robust methods.
... After weighting, 7 For a detailed description of the covariates, see Pohlan (2019). 8 The selection of these covariates aligns with the control variables used in other empirical studies on the non-pecuniary effects of job loss (see, e.g., Kassenboehmer andHaisken-DeNew 2009 andMarcus 2013). there are no longer statistically significant differences between the treatment and control group (column (1) vs. column (3) of Table 1). ...
This paper studies the long-term consequences of unemployment on different dimensions of social exclusion. Based on longitudinal linked survey and administrative data from Germany and an event study analysis combined with inverse propensity score weighting, I document that becoming unemployed has lasting adverse effects on both individuals’ material well-being and their subjective perception of social status and integration, persisting even after four years. An examination of effect heterogeneity underscores that the enduring effects of job loss are more pronounced for individuals confronted with challenging labor market conditions, those with a history of repeated unemployment, and individuals with lower levels of educational attainment.
... Because covariate balance is directly incorporated into the estimation procedure, there is minimal concern for stochastically balanced covariate moments which can be seen in other propensity score methods such as matching, stratification, and inverse probability weighting. 22,23 If the appropriate variables are included, the covariate balance between treatment and control groups within an observational study will closely match that of a randomized cohort. ...
Objectives
To evaluate the therapeutic effect of post‐operative radiotherapy (PORT) with respect to nodal status among patients with head and neck Merkel cell carcinoma (HNMCC).
Methods
In this retrospective study, we queried Surveillance, Epidemiology, and End Results (SEER) dataset from 2000 through 2019. We included all adult patients who received primary surgical resection for histologically confirmed treatment naive HNMCC. Entropy balancing was used to reweight observations such that there was covariate balance between patients who received PORT and patients who received surgical resection alone. Doubly robust estimation was achieved by incorporating weights into a multivariable cox proportional hazards model. Planned post hoc subgroup analysis was performed to evaluate the impact of PORT by pathological node status.
Results
Among 752 patients (mean age, 73.3 years [SD 10.8]; 64.2% male; 91.2% White; 41.9% node‐positive), 60.4% received PORT. Among node‐positive patients, we found that PORT was associated with improved overall survival (OS) (aHR, 0.55; 95% CI, 0.37–0.81; p = 0.003) and improved disease‐specific survival (DSS) (aHR, 0.57; 95% CI, 0.35–0.92; p = 0.022). Among node‐negative patients, we found that PORT was not associated with OS and was associated with worse DSS (aHR, 2.34; 95% CI, 1.30–4.23; p = 0.005).
Conclusions
We found that PORT was associated with improved OS and DSS for node‐positive patients and worse DSS for node‐negative patients. For HNMCC treated with primary surgical resection, these data confirm the value of PORT for pathologically node‐positive patients and support the use of single modality surgical therapy for pathologically node‐negative patients without other adverse risk factors.
Level of Evidence
4 Laryngoscope, 134:3587–3594, 2024
... To rule out any anticipatory effects in women's actual or desired working hours, in as these job loss events are seen as credibly exogenous (e.g. Marcus, 2013;Schmieder et al., 2023). However, as already explained in Section 2.1, we also include dismissals as another type of involuntary job loss. ...
Existing research has found little to no evidence for an added worker effect. However, studies to date have only analysed individuals’ actual labor supply responses to their partners’ job loss, neglecting to consider a potential mismatch between desired and actual labor supply adjustments. Using data from the German Socio-Economic Panel (SOEP), we study individuals’ changes in actual and desired working hours after their partners’ involuntary job loss in an event study design. Our results show that neither desired nor actual working hours change significantly. Thus, we provide first evidence that the absence of the added worker effect is in line with individuals’ stated labor supply preferences and is not the result of an inability to realise desired working hours.
JEL Code: J22 · H55
... To overcome this is less of an issue if we use the dummy variable created instead. 6 There are many examples in the well-being and life satisfaction literature of research overcoming issues of causality by using panel data (Böckerman & Ilmakunnas, 2009;Marcus, 2013). Being restricted to a crosssectional data set means to test for causality we would need an instrument that predicted views towards AI and automation but did not directly correlate with life satisfaction. ...
The paper estimates whether there is any relationship between life satisfaction and people’s perceptions towards artificial intelligence. Using data from 39 European countries collected in 2021, it is consistently found that people with negative perceptions report lower life satisfaction. This finding is robust across a number of robustness checks. This provides further evidence that people may fear some new technologies, in this case artificial intelligence, which adds weight to governments needing to establish moratoriums to openly discuss what the objectives of new science, technologies and innovations are and how best to manage and steer policy and regulation to achieve these objectives.
... So far, few studies on the effects of unemployment on partners' health have employed longitudinal data and used methods that reduce the bias related to the selectivity of unemployed individuals with respect to preexisting health differences. One study that overcame these shortcomings was carried out in Germany by Marcus (2013), who observed larger negative effects on mental health when male partners experienced job losses than when job losses were experienced by female partners. In a study using data from the UK, Mendolia (2014) has shown that when a husband loses a job, his wife's mental health deteriorates. ...
The happy-productive worker hypothesis, considered a significant concept in management research, continues to generate debate and lacks conclusive evidence. In this study, two dimensions of wellbeing: Wellbeing as context-free (psychological wellbeing), and Work-related wellbeing (job satisfaction), were examined on the performance of distance education facilitators in Ghana. In addition, work engagement and its dimensions were introduced as mediators in explaining why happy workers are more productive. A three-wave time-lagged data was collected from 431 facilitators working in two distance education institutions in Ghana. The results revealed that wellbeing as context-free did not have a direct impact on performance but rather an indirect impact on performance via work engagement and two of its dimensions (vigor and absorption). However, work-related wellbeing had both direct and indirect effects on performance via work engagement and one of its dimensions (absorption). In light of the study’s findings, the happy-productive worker hypothesis was generally supported, but the study concluded that the hypothesis is more nuanced than initially perceived. Therefore, organizational management, including educational management, should develop and implement effective interventions to promote their employees’ wellbeing.
Mental health, which is an integral and essential part of health, has long been of little concern in China and has attracted the attention of the public. Previous studies have found that unemployment is a contributing factor affecting mental health. However, there is hardly any rigorous evidence in China thus far, and the underlying mechanism of how unemployment affects mental health is poorly understood. Using data collected from the China Family Panel Studies survey (2010–2018), we applied fixed-effects models to examine how unemployment affects residents’ mental health and the possible influencing channels. These findings support the idea that unemployment negatively affects the mental health of Chinese interviewees. Frequency of physical exercise mediates the relationship between unemployment and mental health. Further analysis revealed that medical insurance had a moderating effect on the mental health of the unemployed. The study summarizes the main findings and provides possible policy implications.
We examine the impact of mental health on financial risk attitudes using panel data from Australia. In an instrumental-variables framework that tries to address the endogeneity of mental health, we find that poor mental health can lead to a higher willingness to take risks. Specifically, a standard deviation decrease in mental health leads to a 10.3 percentage point increase in the likelihood of taking financial risks. This finding remains robust across various sensitivity checks and highlights the significant role that mental health plays in risk-taking preferences in financial matters.
The share of couples where the wife out-earns the husband is increasing globally. In this paper, I examine how this dynamic affects mental health. Using data on the 2001 marital cohort in Sweden, I show that while mental health is positively associated with own and spousal income, it is negatively linked to the wife’s relative income. In the most conservative specification, the wife starting to earn more increases the likelihood of a mental health diagnosis by 8-11%. This represents a significant indirect cost of changes in family dynamics.
We show the influence the size of a corporate board has on firms' ESG controversies. Our analysis suggests that businesses with larger boards are more effective in mitigating ESG controversies. Specifically, a rise in board size by one standard deviation results in a decline in ESG controversies by 4.30%. Our findings corroborate the anticipation that businesses need the board's advice to prevent ESG controversies. Thus, larger boards, with more human capital and more interactions with stakeholders, promote sustainability more effectively. Moreover, we find that the effect of board size is less pronounced during a stressful time but is more evident in companies with more agency problems. Further analysis validates the findings, that is, propensity score matching, entropy balancing, an instrumental‐variable analysis, and GMM dynamic panel data analysis.
We study the co‐evolution of mental health with the most prominent risk factors associated with the COVID‐19 pandemic for the Dutch working population. We exploit data from the Longitudinal Internet Studies for the Social Sciences panel from before the pandemic and five questionnaires in its first year. We find mental health decreased sharply with the onset of the first lockdown but recovered quickly, reaching levels comparable to those a year earlier. Labor market uncertainty, perceived infection risk, and loneliness are all associated with worsening mental health. Moreover, parents of children younger than 12 experience a significant drop in mental health.
Unemployment affects not only the subjective well-being of the individual, but also that of the partner. Based on the life course perspective and the spillover-crossover-model, we examine the mediating role of relationship functioning for such crossover effects of partner’s unemployment on subjective well-being. We also test whether gender differences in the mechanism of relationship functioning can explain the larger overall crossover effects on women compared to men. We use data from the German Family Panel pairfam (2008/09–2018/19), which provide more direct and comprehensive measures of relationship functioning than previous research, and allow us to examine couples’ communication and interactions, their conflict styles and behaviors, relationship satisfaction, and perceived relationship instability as mediators. To analyze the impact of the partner’s transition to unemployment on subjective well-being, we use fixed effects panel regression models and the product method of mediation analysis to estimate the indirect effects of relationship functioning. The results show that a partner’s transition to unemployment has a negative impact on one’s own well-being. The effects are more pronounced for women than men which can be partly explained by gender-specific effects of the partner’s unemployment on various aspects of relationship functioning, rather than by differential effects of the latter on one’s own well-being.
This paper uses data from the Panel Study of Income Dynamics to study the relationship between job displacement and substance use among young adults. Results show that displacement is associated with increases in the probability of smoking cigarettes and drinking and the intensity of consuming alcohol and marijuana. Men, whites, and those who live with family/friends at the time of displacement are more likely to use hard drugs after job loss. Findings suggest that government policy designed to aid displaced workers should contain provisions to anticipate and respond to substance use disorders that may arise, particularly among younger job losers.
This paper reports a meta‐analysis of the relationship between unemployment and health. Our meta‐dataset consisted of 327 study results taken from 65 articles published in peer‐reviewed journals between 1990 and 2021. We found that publication bias is important, but only for those study results obtained by means of difference‐in‐differences or instrumental variables estimators. On average, the effect of unemployment on health is negative, but quite small in terms of partial correlation coefficients. We investigated whether the findings were heterogeneous across several research dimensions. We found that unemployment has the strongest impact on the psychological domains of health and long‐term unemployment spells are more detrimental than short‐term ones. Furthermore, women are less affected, studies dealing with endogeneity issues find smaller effects and the health penalty is increasing with unemployment rate.
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.
Cet article examine le lien entre les licenciements économiques et la santé mentale des employés. Nous évaluons l’effet d’un plan de licenciement économique sur la santé mentale des salariés en emploi permanent non licenciés restant dans l’entreprise, dans un marché du travail dual. Nous nous appuyons sur une enquête française couplée aux données de l’assurance maladie pour suivre la consommation individuelle avant et après l’événement. Nous appliquons une méthode de différence de différences avec un appariement exact. Les estimations indiquent une augmentation significative, après un plan de licenciements économiques, de la consommation de médicaments psychotropes des employés survivants, par rapport à ceux non concernés par un plan de licenciement. Les résultats suggèrent également un effet négatif des licenciements économiques sur la santé mentale subjective des employés, mesurée par le Mental Health Index (MHI) . Des résultats complémentaires suggèrent que l’ampleur de ces effets est importante mais apparaît plus modérée que celle des effets d’autres événements, tels qu’avoir été confronté à des difficultés financières ou à un confinement dans le passé, vécus par les salariés. JEL Codes: J6, I10
The Stata package ebalance implements entropy balancing, a multivariate reweighting method described in Hainmueller (2012 ) that allows users to reweight a dataset such that the covariate distributions in the reweighted data satisfy a set of specified moment conditions. This can be useful to create balanced samples in observational studies with a binary treatment where the control group data can be reweighted to match the covariate moments in the treatment group. Entropy balancing can also be used to reweight a survey sample to known characteristics from a target population.
This survey gives a brief overview of the literature on the difference-indifference
(DiD) estimation strategy and discusses major issues using
a treatment effects perspective. In this sense, this survey gives a somewhat
different view on DiD than the standard textbook discussion of
the DiD model, but it will not be as complete as the latter. It contains
some extensions of the literature, for example, a discussion of, and suggestions
for nonlinear DiD estimators as well as DiD estimators based
on propensity-score type matching methods.
The propensity score is the conditional probability of assignment to a particular treatment given a vector of observed covariates. Both large and small sample theory show that adjustment for the scalar propensity score is sufficient to remove bias due to all observed covariates. Applications include: (i) matched sampling on the univariate propensity score, which is a generalization of discriminant matching, (ii) multivariate adjustment by subclassification on the propensity score where the same subclasses are used to estimate treatment effects for all outcome variables and in all subpopulations, and (iii) visual representation of multivariate covariance adjustment by a two- dimensional plot.
Previous research on multiple role stress has hypothesized the existence of two types of stress contagion: spillover, in which the stresses experienced in either the work or home domain lead to stresses in the other domain; and crossover, in which the stresses experienced by one's spouse at work lead to stresses for oneself at home. However, empirical evidence of these processes has been largely indirect and qualitative. This study provides the first direct quantitative evidence on the causal dynamics of stress contagion across work and home domains in married couples. Contrary to previous thinking, results indicate that husbands are more likely than their wives to bring their home stresses into the workplace. Also, stress contagion from work to home was evident for both husbands and wives. Furthermore, the contagion of work stress into the home sets in motion a process of dyadic adjustment, whereby individuals, particularly wives, appear to modify their housework efforts to compensate for the work stresses of their spouses. Such findings provide important insights into the dynamics of gender differences in role stress and confirm the value of studying chronic stress processes at the level of analysis where such stresses are inevitably manifest—in day-to-day events and activities.
This article assesses the potential for reducing attrition bias by replacing survey dropouts with substitutes drawn from the same population and identified using propensity score matching. By linking register data with survey data, it is possible to observe unemployment outcomes for dropouts and therefore to test models of attrition. Doing so reveals the dropout process for unemployment to be nonignorable in this survey such that the commonly-used method of reweighting non-dropouts on the basis of sample frame information will be ineffective in overcoming attrition bias. The results indicate the effectiveness in theory of using substitutes but suggest that practical applications may only be successful where it is possible to incorporate information additional to that available in the sampling frame. Under such circumstances, it may similarly be possible to address nonignorable attrition by reweighting respondents.
This paper proposes entropy balancing, a data preprocessing method to achieve covariate balance in observational studies with binary treatments. Entropy balancing relies on a maximum entropy reweighting scheme that calibrates unit weights so that the reweighted treatment and control group satisfy a potentially large set of prespecified balance conditions that incorporate information about known sample moments. Entropy balancing thereby exactly adjusts inequalities in representation with respect to the first, second, and possibly higher moments of the covariate distributions. These balance improvements can reduce model dependence for the subsequent estimation of treatment effects. The method assures that balance improves on all covariate moments included in the reweighting. It also obviates the need for continual balance checking and iterative searching over propensity score models that may stochastically balance the covariate moments. We demonstrate the use of entropy balancing with Monte Carlo simulations and empirical applications.
We use administrative data on the quarterly employment and earnings of Pennsylvanian workers in the 1970s and 1980s matched
to Social Security Administration death records covering 1980–2006 to estimate the effects of job displacement on mortality.
We find that for high-seniority male workers, mortality rates in the year after displacement are 50%–100% higher than would
otherwise have been expected. The effect on mortality hazards declines sharply over time, but even twenty years after displacement,
we estimate a 10%–15% increase in annual death hazards. If such increases were sustained indefinitely, they would imply a
loss in life expectancy of 1.0–1.5 years for a worker displaced at age forty. We show that these results are not due to selective
displacement of less healthy workers or to unstable industries or firms offering less healthy work environments. We also show
that workers with larger losses in earnings tend to suffer greater increases in mortality. This correlation remains when we
examine predicted earnings declines based on losses in industry, firm, or firm-size wage premiums.
Job displacement is widely considered a negative life event associated with subsequent economic decline and depression as established by numerous prior studies. However, little is known about whether the form of job displacement (i.e. layoffs versus plant closings) differentially affects depression. We assess the effects of different ways in which a worker is displaced on subsequent depression among U.S. men and women nearing retirement. We hypothesize that layoffs should be associated with larger effects on depression than plant closings, particularly among men. Our findings generally support our hypotheses. We find that men have significant increases in depression as a result of layoffs, but not as a result of plant closings, while the reverse is true among women.
This microeconometric study analyzes the effects of individual leisure sports participation on long-term labour market variables, health and subjective well-being indicators for West Germany based on individual data from the German Socio-Economic Panel study (GSOEP) 1984-2006. Econometric problems due to individuals choosing their own level of sports activities are tackled by combining informative data and flexible semiparametric estimation methods with a specific way to use the panel dimension of the data. The paper shows that sports activities have sizeable positive long-term labour market effects in terms of earnings and wages, as well as positive effects on health and subjective well-being.
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Regression methods were used to select and score 12 items from the Medical Outcomes Study 36-Item Short-Form Health Survey (SF-36) to reproduce the Physical Component Summary and Mental Component Summary scales in the general US population (n=2,333). The resulting 12-item short-form (SF-12) achieved multiple R squares of 0.911 and 0.918 in predictions of the SF-36 Physical Component Summary and SF-36 Mental Component Summary scores, respectively. Scoring algorithms from the general population used to score 12-item versions of the two components (Physical Components Summary and Mental Component Summary) achieved R squares of 0.905 with the SF-36 Physical Component Summary and 0.938 with SF-36 Mental Component Summary when cross-validated in the Medical Outcomes Study. Test-retest (2-week)correlations of 0.89 and 0.76 were observed for the 12-item Physical Component Summary and the 12-item Mental Component Summary, respectively, in the general US population (n=232). Twenty cross-sectional and longitudinal tests of empirical validity previously published for the 36-item short-form scales and summary measures were replicated for the 12-item Physical Component Summary and the 12-item Mental Component Summary, including comparisons between patient groups known to differ or to change in terms of the presence and seriousness of physical and mental conditions, acute symptoms, age and aging, self-reported 1-year changes in health, and recovery for depression. In 14 validity tests involving physical criteria, relative validity estimates for the 12-item Physical Component Summary ranged from 0.43 to 0.93 (median=0.67) in comparison with the best 36-item short-form scale. Relative validity estimates for the 12-item Mental Component Summary in 6 tests involving mental criteria ranged from 0.60 to 107 (median=0.97) in relation to the best 36-item short-form scale. Average scores for the 2 summary measures, and those for most scales in the 8-scale profile based on the 12-item short-form, closely mirrored those for the 36-item short-form, although standard errors were nearly always larger for the 12-item short-form.
Major events in the life of an older individual, such as retirement, a significant decrease in income, death of the spouse, disability, and a move to a nursing home, may affect the mental-health status of the individual. For example, the individual may enter a prolonged depression. We investigate this using unique longitudinal panel data that track labor market behavior, health status, and major life events, over time. To deal with endogenous aspects of these events we apply fixed effects estimation methods. We find some strikingly large effects of certain events on the occurrence of depression. We relate the results to the health care and labor market policy towards older individuals.
This study estimates the consequences of older husbands' involuntary job loss for their wives' mental health.
Using longitudinal data from the 1992, 1994, and 1996 waves of the Health and Retirement Study, multivariate regression models were estimated to measure the impact of older husbands' involuntary job loss on wives' mental health. We created two longitudinal data sets of two waves each to use in our analysis. The first data set, or period, combined Waves 1 and 2 of the Health and Retirement Study and described the 1992-1994 experience of spouse pairs in our sample. It included the wives of 55 husbands who experienced involuntary job loss between these survey dates and a comparison group of wives of 730 continuously employed husbands. The second data set described the 1994-1996 experience of couples. In particular, it included the wives of an additional 38 husbands who were displaced from their jobs between Waves 2 and 3, and a comparison group of wives of 425 husbands who were continuously employed from 1994 to 1996.
Husbands' involuntary job loss did not have a statistically significant effect on wives' mental health. We found no evidence that changes in husbands' depressive symptoms modified the effect of his job loss on wives' mental health. In the first period only, the effect of husbands' job loss on wives' mental health was more pronounced for wives who were more financially satisfied at baseline.
There is limited evidence among this cohort that husbands' job loss increases wives' subsequent depressive symptoms. However, the effect of husbands' job loss on wives' mental health appears to be magnified when wives report being financially satisfied pre-job loss. This suggests that, for subgroups of older couples, mental health services specifically targeted at displaced men should also be made available to wives.
I study a budget-constrained, private-valuation, sealed-bid sequential auction with two incompletely-informed, risk-neutral bidders in which the valuations and income may be non-monotonic functions of a bidder's type. Multiple equilibrium symmetric bidding functions may exist that differ in allocation, efficiency and revenue. The sequence of sale affects the competition for a good and therefore also affects revenue and the prices of each good in a systematic way that depends on the relationship among the valuations and incomes of bidders. The sequence of sale may affect prices and revenue even when the number of bidders is large relative to the number of goods. If a particular good, say [alpha], is allocated to a strong bidder independent of the sequence of sale, then auction revenue and the price of good [alpha] are higher when good [alpha] is sold first.
This paper examines the causal effect of job loss on overall and cause-specific mortality. Using linked employer-employee register data, we identified the job losses due to all establishment closures in Sweden in 1987 and 1988. Hence, we have extended the case study approach, which has dominated the plant closure literature, and also been able to remedy most weaknesses associated with previous studies. We found that the overall mortality risk for men was increased by 44 percent during the first four years following job loss. For women and in the longer run we found no effects. The short-run excess mortality was mainly attributed to increased risk of suicides and alcohol-related causes of death. For both sexes, the increase in suicides was about twofold for both men and women, while the increase in alcohol-related causes of death was somewhat less.
This paper estimates the effect of involuntary job loss on smoking behavior and body weight using German Socio-Economic Panel Study data. Baseline nonsmokers are more likely to start smoking due to job loss, while smokers do not intensify their smoking. Job loss increases body weight slightly, but significantly. In particular, single individuals as well as those with lower health or socioeconomic status prior to job loss exhibit high rates of smoking initiation. The applied regression-adjusted semiparametric difference-in-difference matching strategy is robust against selection on observables and time-invariant unobservables. This paper provides an indirect test showing that the identifying assumption is not violated in the difference-in-difference estimator. The findings are robust over various matching specifications and different choices of the conditioning variables.
The objective of this work was to assess the reliability and validity of the Medical Outcomes Study Short-Form 12-Item Health Survey (SF-12) in a large sample of people with severe mental illness (SMI).
We examined the internal factor structure of the SF-12, compared component scores for this sample with normative levels, examined test-retest reliability, and examined convergent and divergent validity by comparing SF-12 scores to other indexes of physical and mental health.
The SF-12 distinguished this sample of people with SMI from the general population, was stable over a 1-week interval, consisted of 2 fairly distinct factors, and was related to physical and mental health indexes in expected ways.
The SF-12 appears to be a psychometrically sound instrument for measuring health-related quality of life for people with SMI.
The associations between work demands, supports, and levels of psychological and physical health have been clearly established by research. There is growing evidence that occupational stressors are transmitted to spouses, with a possible subsequent effect on disease risks and life expectancy of both marital partners. The present study investigates the extent and direction of occupational stress transmission and the possible psychological mechanisms in a survey of 60 working couples. It analyzes the relationships between partners' psychological strain levels, investigates the accuracy of couples perceptions of each other's work stressors, and analyzes the complex interrelationships between an individual's work and the mental well-being of their spouse. Results show that work-related discussion is frequent among marital partners and that individuals have accurate perceptions of their partners' jobs. The study found evidence of transmission of stress from men to women, particularly where men have high strain jobs (high in demand and low in support), but no corresponding transmission from women to men. Some tentative explanations and proposals for further research are offered.
While a number of papers have analyzed the effects of job loss on various measures of health, this paper is the first to explore the extent to which the health effects extend to the children of displaced workers. More generally, this research sheds light on the causal link between socioeconomic status and infant health, as job displacements can be thought of as providing a plausibly exogenous shock to income. Specifically, I use detailed work and fertility histories from the Panel Study of Income Dynamics to estimate the impact of parents' job displacements on children's birth weights. These data allow for an identification strategy that essentially compares the outcomes of children born after a displacement to the outcomes of their siblings born before using mother fixed effects. I find that husbands' job losses have significant negative effects on infant health. They reduce birth weights by approximately four percent with the impact concentrated on the lower half of the birth weight distribution.
The Stata package ebalance implements entropy balancing, a multivariate reweighting method described in Hainmueller (2011) that allows users to reweight a dataset such that the covariate distributions in the reweighted data satisfy a set of specied moment conditions. This can be useful to create balanced samples in observational studies with a binary treatment where the control group data can be reweighted to match the covariate moments in the treatment group. Entropy balancing can also be used to reweight a survey sample to known characteristics from a target population.
We analyze the effect of job insecurity on psychological health. We extend the group of people being affected to employees who have insecure jobs to account for a broader measure of the mental health consequences of potential unemployment. Using panel data with staff reductions in the company as an exogenous source of job insecurity, we find that an increase in fear of unemployment substantially decreases the mental health status of employees. Quantile regression results yield particularly strong effects for individuals of already poor mental health.
This paper reviews findings from a panel study of Boston area unemployed men and their families. Psychological effects of unemployment on workers and their wives are summarized, particularly for the first half year of joblessness. Family responses to job loss are also examined, including the role of the marital relationship in buffering workers' stress. Finally, policy and service implications of this research are discussed. Consideration is given not only to the mental health needs of workers, but to frequently overlooked qualities of efficacy and resilience among the unemployed.
This article examines the impact of unemployment for men and women on life satisfaction for Germany 1991–2006 using the German Socio-Economic Panel. We find that for women in east and west Germany, company closures in the year of entry into unemployment produce strongly negative effects on life satisfaction over and above an overall effect of unemployment, providing prima facie evidence of reduced outside work options, large investments in firm-specific human capital or a family constraint. The large compensating variation in terms of income indicates enormous non-pecuniary negative effects for women of exogenous entry unemployment due to company closures.
The paper investigates the extent to which parental unemployment affects young people's far right-wing party affinity. Cross-sectional estimates from the German Socio-Economic Panel show a positive relationship between growing up with unemployed parents and support for the extreme right. The paper uses differences in parental unemployment experience during childhood across siblings to investigate a causal relationship. Sibling differences estimates suggest that young people who experience parental unemployment have a significantly higher chance of supporting extreme right-wing parties in Germany. The results show that the effect is particularly strong among East Germans, and stronger among sons than daughters. Moreover, the estimates point to a strong and positive effect of growing up in a single-parent family on young people's far right-wing party affinity, whereas household income appears to be an insignificant predictor.
We investigate whether job loss due to plant closure causes an increased risk of (cause-specific) mortality and hospitalization for male workers having strong labour market attachment. We use administrative data: a panel of all persons in Denmark in the period 1980-2006, containing records on health and work status, and a link from workers to plants. We use propensity score weighting combined with non-parametric duration analysis. We find that job loss increases the risk of overall mortality and mortality caused by circulatory disease; of suicide and suicide attempts; and of death and hospitalization due to traffic accidents, alcohol-related disease, and mental illness.
The propensity score is the conditional probability of assignment to a particular treatment given a vector of observed covariates. Both large and small sample theory show that adjustment for the scalar propensity score is sufficient to remove bias due to all observed covariates. Applications include: (i) matched sampling on the univariate propensity score, which is a generalization of discriminant matching, (ii) multivariate adjustment by subclassification on the propensity score where the same subclasses are used to estimate treatment effects for all outcome variables and in all subpopulations, and (iii) visual representation of multivariate covariance adjustment by a two-dimensional plot.
We analyse the effect of unemployment on health using information from the German Socio-Economic Panel of the years 1991–2008. To establish a causal effect we rely on fixed-effects methods and plant closures as exogenous entries into unemployment. Although unemployment is negatively correlated with health, we do not find a negative effect of unemployment due to plant closure on health across several health measures (health satisfaction, mental health, and hospital visits). For this subgroup of the unemployed, unemployment does not seem to be harmful and selection effects of ill individuals into unemployment are likely to contribute to the observed overall correlation between poor health and unemployment.
This paper is the first to explore the extent to which the health effects of job displacement extend to the children of displaced workers. Using detailed work and fertility histories from the Panel Study of Income Dynamics, estimates are identified by comparing the outcomes of children born after a displacement to the outcomes of those born before. This analysis reveals that husbands' job losses have significant negative effects on infant health. They reduce birth weights by approximately four and a half percent with suggestive evidence that the effect is concentrated on the lower half of the birth weight distribution.
This study assessed the screening utility of the 12-item Short-Form Health Survey's (SF-12) mental health component scale (MCS-12) for diagnosable depression and anxiety disorders in a general population sample, and thus, the validity of this scale as a measure of mental health in epidemiological research. Data were from the Australian National Survey of Mental Health and Wellbeing (N=10,504). Diagnoses were made using the Composite International Diagnostic Interview. The MCS-12 was compared to other brief scales: the RAND Mental Health Component scale (RAND MHC-12, an alternative scoring method for the MCS-12), the 12-item General Health Questionnaire (GHQ-12), the Kessler Psychological Distress Scale (K10 and K6), and an estimate of the Mental Health Inventory (MHI-5). The MCS-12 and RAND MHC-12 were equally able to discriminate respondents with the target diagnoses. The MCS-12 performed better than the GHQ-12, and equally to the K6 for diagnoses of depression, though not anxiety disorders, where the K6 showed greater utility. The K10 out-performed the MCS-12 for all diagnoses. Areas under receiver operating characteristics curves (AUC) indicated that the MCS-12 is valid measure of mental health in epidemiological research, and a useful screening tool for both depression (AUC=0.92) and anxiety disorders (AUC=0.83).
We use data from the German Socio-Economic Panel to investigate how individual happiness is affected by unemployment. Unemployment has a large and negative effect even after controlling for individual specific fixed effects. Nonparticipation, in contrast, is much less harmful to happiness. Further, we decompose the total well-being costs of unemployment and find that well above three quarters are non-pecuniary, and below one quarter pecuniary. One implication is that income support programs for the unemployed do very little at mitigating the adverse effects of unemployment, and such transfers are unlikely to generate unemployment.
This paper examines the impact of job loss due to business closings on body mass index (BMI) and alcohol consumption. We suggest that the ambiguous findings in the extant literature may be due in part to unobserved heterogeneity in response and in part due to an overly broad measure of job loss that is partially endogenous (e.g., layoffs). We improve upon this literature using: exogenously determined business closings, a sophisticated estimation approach (finite mixture models) to deal with complex heterogeneity, and national, longitudinal data from the Health and Retirement Study. For both alcohol consumption and BMI, we find evidence that individuals who are more likely to respond to job loss by increasing unhealthy behaviors are already in the problematic range for these behaviors before losing their jobs. These results suggest the health effects of job loss could be concentrated among "at risk" individuals and could lead to negative outcomes for the individuals, their families, and society at large.
Distress resulting from work and family overload is likely to be interdependent between partners, as both men and women increasingly participate in work and family tasks. We attempted to explain distress of both partners by looking at their work and family demands and the resulting time and energy deficits experienced by each partner. Furthermore, we investigated how time deficit, energy deficit and distress due to such demands crossover between partners. The study, which used a precise measurement of family demands, was based on a sample of both partners from 828 dual-earner couples in The Netherlands. The results showed that for both partners work and family demands increase time deficit and energy deficit. Energy deficit due to heavy demands resulted in more feelings of distress, whereas time deficit did not contribute significantly to distress. We found different patterns of crossover between male and female partners. Feelings of time deficit and energy deficit crossed over from the man to the woman, whereas feelings of distress crossed over from the woman to the man. These results indicate that the demands on each partner contribute to their own distress, as well as to their partner's distress, either through the crossover of energy deficit or through the crossover of distress
We study the short-run effect of involuntary job loss on comprehensive measures of public health costs. We focus on job loss induced by plant closure, thereby addressing the reverse causality problem as job displacements due to plant closure are unlikely caused by workers' health status, but potentially have important effects on individual workers' health and associated public health costs. Our empirical analysis is based on a rich data set from Austria providing comprehensive information on various types of health care costs and day-by-day work history at the individual level. Our central findings are (i) overall expenditures on medical treatments are not strongly affected by job displacement; (ii) job loss significantly increases expenditures for antidepressants and related drugs, as well as for hospitalizations due to mental health problems for men (but not for women) although the effects are economically rather small; and (iii) sickness benefits strongly increase due to job loss.
This study estimates the effect of job loss on health for near elderly employees based on longitudinal data from the Health and Retirement Study. Previous studies find a strong negative correlation between unemployment and health. To control for possible reverse causality, this study focuses on people who were laid off for an exogenous reason - the closure of their previous employers' business. I find no causal effect of exogenous job loss on various measures of physical and mental health. This suggests that the inferior health of the unemployed compared to the employed could be explained by reverse causality.
Earnings shocks should affect divorce probability by changing a couple's expected gains from marriage. We find that the divorce hazard rises after a spouse's job displacement but does not change after a spousal disability. This difference casts doubt on a purely pecuniary motivation for divorce following earnings shocks, since both types of shocks exhibit similar long-run economic consequences. Furthermore, the increase in divorce is found only for layoffs and not for plant closings, suggesting that information conveyed about a partner's noneconomic suitability as a mate due to a job loss may be more important than financial losses in precipitating divorce.
This article uses seven waves of panel data to test for social norms in labor market status. The unemployed's well-being is shown to be strongly positively correlated with reference group unemployment (at the regional, partner, or household level). This result, far stronger for men, is robust to controls for unobserved individual heterogeneity. Panel data also show that those whose well-being fell the most on entering unemployment are less likely to remain unemployed. These findings suggest a psychological explanation of both unemployment polarization and hysteresis, based on the utility effects of a changing employment norm in the reference group.
This article examines the "added worker effect," which is the labor supply response of wives to their husbands' job losses. Unlike past studies, which focused on the husbands' current unemployment status, this article analyzes wives' responses before and after job losses to examine the life-cycle labor supply adjustments. Using Panel Study of Income Dynamics data reveals small predisplacement effects and large, persistent postdisplacement effects. The timing of the responses differs with type of displacement, possibly because of differences in the information acquired before job loss. Long-run labor supply increases compensate for over 25% of the husbands' lost income.
This article examines the long-term wage and earnings losses of displaced workers using longitudinal data from the Panel Study of Income Dynamics. Consistent with previous research, the author finds that the effects of displacement are quite persistent, with earnings and wages remaining approximately 9 percent below their expected levels six or more years after displacement. She then shows that much of this persistence can be explained by additional job losses in the years following an initial displacement. Workers who avoid additional displacements have earnings and wage losses of 1 percent and 4 percent six or more years after job loss. Copyright 1997 by University of Chicago Press.
After the introduction in Section 2, we very briefly sketch out current theoretical and empirical developments in the social sciences. In our view, they all point in the same direction: toward the acute and increasing need for multidisciplinary longitudinal data covering a wide range of living conditions and based on a multitude of variables from the social sciences for both theoretical investigation and the evaluation of policy measures. Cohort and panel studies are therefore called upon to become truly interdisciplinary tools. In Section 3, we describe the German Socio-Economic Panel Study (SOEP), in which we discuss recent improvements of that study which approach this ideal and point out existing shortcomings. Section 4 concludes with a discussion of potential future issues and developments for SOEP and other household panel studies.
Synopsis
This paper reviews literature on the mental health effects of involuntary job loss among women. In addition, a prospective study of the effects of job loss on psychological distress in a cohort of blue-collar women is described. A total of 141 women, of whom 73 were laid off during the 12-month study period, were examined. The occurrence and duration of lay-off was significantly associated with increased depressive symptoms, but not anxiety-related symptoms, even after effects of pre-lay-off psychological symptoms, social supports and occupational stress were considered. There was no evidence that these effects of lay-off were moderated by other characteristics measured prior to lay-off. Among women who were laid off, those who reported poor levels of support from their husband or partner in the immediate aftermath of lay-off and those experiencing more financial difficulties during the lay-off had higher depression levels at follow-up. The nature of the lay-off as a chronic psychosocial stressor is discussed.
We performed a prospective study focused on the short-term and long-term mental health effects of husbands' layoff on wives. A sample of 149 mothers of young children, approximately half of whose husbands became unemployed due to layoff during the two-year study period, was examined. We hypothesized that husbands' layoff would cause elevations in psychiatric symptoms and that women with particular risk factors would be more vulnerable to the impact of this event. The effects of the following eight risk factors, measured before husbands' layoff, were examined: psychiatric history, familial psychiatric history, three or more children in the home, lack of employment outside the home, financial difficulties, low marital satisfaction, low social support from relatives, and low social support from friends. Although husbands' layoff did not have short-term effects on wives' symptoms, their levels of distress were elevated by the end of the study period. In addition, three risk factors--familial psychiatric history, financial difficulties, and low social support from relatives--significantly increased women's vulnerability to long-term psychological distress following their husbands' layoff.
We investigate whether job loss as the result of displacement causes hospitalization for stress-related diseases which are widely thought to be associated with unemployment. In doing this, we use much better data than any previous investigators. Our data are a random 10% sample of the male population of Denmark for the years 1981-1999 with full records on demographics, health and work status for each person, and with a link from every working person to a plant. We use the method of 'matching on observables' to estimate the counter-factual of what would have happened to the health of a particular group of displaced workers if they had not in fact been displaced. Our results indicate unequivocally that being displaced in Denmark does not cause hospitalization for stress-related disease. An analysis of the power of our test suggests that even though we are looking for a relatively rare outcome, our data set is large enough to show even quite small an effect if there were any. Supplementary analyses do not show any causal link from displacement or unemployment to our health outcomes for particular groups that might be thought to be more susceptible.
We examine the relationship between unemployment and self-assessed health using the European Community Household Panel for Finland over the period 1996-2001. Our results show that the event of becoming unemployed does not matter as such for self-assessed health. The health status of those that end up being unemployed is lower than that of the continually employed. Therefore, persons who have poor health are being selected for the pool of the unemployed. This explains why, in a cross-section, unemployment is associated with poor self-assessed health. All in all, the cross-sectional negative relationship between unemployment and self-assessed health is not found longitudinally.
We estimate the causal effect of mandatory participation in the military service on the involvement in criminal activities. We exploit the random assignment of young men to military service in Argentina through a draft lottery to identify this causal effect. Using a unique set of administrative data that includes draft eligibility, participation in the military service, and criminal records, we find that participation in the military service increases the likelihood of developing a criminal record in adulthood. The effects are not only significant for the cohorts that performed military service during war times, but also for those that provided service at peace times. We also find that military service has detrimental effects on future performance in the labor market.
This paper examines the effect of a husband's job loss on the labor supply of his wife, an effect known as the 'added worker' effect. Unlike past added worker effect studies which focus on the effect of the husband's current unemployment status, this paper analyzes the wife's labor supply response in the periods before and after her husband's job displacement in order to examine the short- and long-run adjustments to an earnings shock. Using the Panel Study of Income Dynamics, small pre-displacement effects are found along with larger and persistent post-displacement effects. The timing of the wives' responses differs by the type of displacement (plant closing vs. permanent layoff), possibly due to differences in the information wives acquire prior to the displacement. In addition, the response is found to increase with the magnitude of the husband's wage loss, to have changed over time (70's vs. 80's) and to vary by the husband's pre-displacement earnings. The long-run increases in the wife's labor supply account for over 25% of the husband's lost income.
We reassess the “scarring” hypothesis by Clark et al. (2001) which states that unemployment experienced in the past reduces a person’s current life satisfaction even after the person has become reemployed. Our results suggest that it is not the scar from past unemployment but the expectation to become unemployed in the future that makes people unhappy. Hence, the terminology should be changed by one letter: unemployment is not “scarring”, but “scaring”.