The Great Recession and Children's Mental Health in Australia

42 Pages Posted: 29 Oct 2018

See all articles by Melisa Bubonya

Melisa Bubonya

University of Melbourne - Melbourne Institute of Applied Economic and Social Research

Deborah A. Cobb-Clark

School of Economics, University of Sydney; IZA Institute of Labor Economics

Daniel Christensen

The University of Western Australia - Telethon Kids Institute

Sarah Johnson

The University of Western Australia - Telethon Kids Institute

Stephen R. Zubrick

The University of Western Australia - Telethon Kids Institute

Abstract

This paper analyzes the effects of 'shocks' to community-level unemployment expectations, induced by the onset of the Great Recession, on children's mental well-being. The Australian experience of the Great Recession represents a unique case study as despite little change in actual unemployment rates, levels of economic uncertainty grew. This affords us the ability to examine the effects of shocks to economic expectations independent of any actual changes to economic conditions. We draw on and link data from multiple sources, including a longitudinal cohort study of children, a consumer sentiment survey and data on local economic conditions.Using our purpose-built data set, we estimate difference-in-differences models to identify plausibly causal effects. We find, for boys, there is no detectable effect of community-level unemployment expectations shocks on mental health. For girls, however, there are modest increases in mental health problems and externalizing behaviors, as measured by the Strengths and Difficulties Questionnaire. We additionally find no discernable change in mother's psychological distress as a result of expectations shocks. These results are stable after controlling for actual labor market conditions.

Keywords: mental health, children, Great Recession, unemployment expectations, cohort studies

JEL Classification: I31, G01, D84

Suggested Citation

Bubonya, Melisa and Cobb-Clark, Deborah A. and Christensen, Daniel and Johnson, Sarah and Zubrick, Stephen R., The Great Recession and Children's Mental Health in Australia. IZA Discussion Paper No. 11891. Available at SSRN: https://ssrn.com/abstract=3273731

Melisa Bubonya (Contact Author)

University of Melbourne - Melbourne Institute of Applied Economic and Social Research ( email )

Level 5, FBE Building, 111 Barry Street
Parkville, 3010
Australia

Deborah A. Cobb-Clark

School of Economics, University of Sydney ( email )

606 Social Sciences Bldg. (A02)
The University of Sydney
Sydney, NSW 2006
Australia
61435061387 (Phone)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Daniel Christensen

The University of Western Australia - Telethon Kids Institute

Sarah Johnson

The University of Western Australia - Telethon Kids Institute

100 Roberts Rd
Subiaco, Western Australia
Australia

Stephen R. Zubrick

The University of Western Australia - Telethon Kids Institute ( email )

100 Roberts Rd
Subiaco, Western Australia
Australia

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