A Family Affair: Job Loss and the Mental Health of Spouses and Adolescents

Abstract

This study examines the impact of involuntary job loss on the mental health of family members. Estimates from fixed-effects panel data models, using panel data for Australia, provide little evidence of any negative spillover effect on the mental health of husbands as a result of their wives’ job loss. The mental well-being of wives, however, declines following their husbands’ job loss, but only if that job loss results in a sustained period of nonemployment or if the couple experienced financial hardship or relationship strain prior to the husband’s job loss. A negative effect of parental job loss on the mental health of co-resident adolescent children is also found, but appears to be restricted to girls.

Keywords: Unemployment, involuntary job loss, mental health, families, spouses, adolescents, HILDA Survey

JEL Classification: I31, J10, J65