Income Insecurity and Mental Health in Pandemic Times

57 Pages Posted: 27 Oct 2022 Last revised: 2 Dec 2022

See all articles by Dirk Foremny

Dirk Foremny

University of Barcelona (Department of Economics); Institut d'Economia de Barcelona; CESifo (Center for Economic Studies and Ifo Institute)

Pilar Sorribas-Navarro

University of Barcelona - Faculty of Economic Science and Business Studies

Judit Vall Castelló

University of Barcelona

Date Written: October 24, 2022

Abstract

This paper provides novel evidence of the mental health effects of the Covid-19 outbreak. Between April 2020 and April 2022, we run four waves of a large representative survey in Spain, which we benchmark against a decade of pre-pandemic data. We document a large and sudden deterioration of mental health at the beginning of the pandemic, as the share of people reporting being depressed increased from 16\% before the pandemic to 46% in April 2020. This effect is persistent over time, which translates into important and irreversible consequences, such as a surge in suicides. The effect is more pronounced for women, younger individuals and those with unstable incomes. Finally, using mediation analysis, event studies and machine learning techniques, we document the role of the labor market as an important driver of these effects, as women and the young are more exposed to unstable income sources.

Keywords: Mental health; gender; inequality; labor markets; pandemic; Covid-19

JEL Classification: I1, I14, H2, H12, E24

Suggested Citation

Foremny, Dirk and Sorribas-Navarro, Pilar and Vall Castelló, Judit, Income Insecurity and Mental Health in Pandemic Times (October 24, 2022). Available at SSRN: https://ssrn.com/abstract=4256715 or http://dx.doi.org/10.2139/ssrn.4256715

Dirk Foremny (Contact Author)

University of Barcelona (Department of Economics) ( email )

c/ John M. Keynes, 1-11
Barcelona, 08034
Spain

Institut d'Economia de Barcelona

Barcelona
Spain

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

Pilar Sorribas-Navarro

University of Barcelona - Faculty of Economic Science and Business Studies ( email )

Barcelona
Spain

Judit Vall Castelló

University of Barcelona ( email )

Gran Via de les Corts Catalanes, 585
Barcelona, 08007
Spain

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