Economic Contraction and Mental Health A Review of the Evidence, 1990-2009

Background: Theory and empirical evidence suggest that economic contraction predicts increased incidence of psychological disorder. The extent to which this relation can be causally attributed to the economic experiences of individuals remains uncertain. Methods: We critically examine literature concerning the impact of economic contraction, measured at the individual or ecological level, on four mental health outcomes (depression, suicide, substance abuse, and antisocial behavior) from the past two decades. Studies at the individual level use job loss, transition to inadequate employment, or welfare as the independent variable. Studies at the ecological level primarily use the unemployment rate. Results: In the studies that best establish causality, research indicates a moderate but significant adverse effect of job loss on individual depression symptoms, but the net population effect remains speculative. For suicide and antisocial behavior, individual- and ecological-level studies converge to suggest a moderate positive association with economic contraction. Although some research on substance abuse suggests procyclical effects, the majority indicate that job loss significantly increases the risk of heavy drinking and symptoms of alcohol abuse. For all outcomes, various characteristics of the population or the specific economic exposure studied can modify the overall association. Conclusions: The studies reviewed suggest that adverse economic transitions predict increased mental health problems, particularly depression, suicide, and substance abuse. The strength of the association, particularly when measuring the response of populations to contracting economies remains unclear.