Association for Public Policy Analysis & Management

Apart from the loss of a source of income, unemployment results in a change of social status, lower self-esteem, loss of work relationships. All of these can potentially influence the mental health of an individual and lead to depressive symptoms. This paper analyzes the relationship between unemployment status and its duration for individuals that have lost their job involuntarily (were laid off or fired) and the self-reported presence of depression.

Study Design:

This study uses logistic regression and a fixed-effects model to account for unobserved time-invariant characteristics.

Population Studied:

This study uses the data from Russian Longitudinal Monitoring Survey (RLMS) for years 2011-2016. I restrict the sample to the individuals who are at least 18 years old, and exclude those who are older than the retirement age as defined by the Russian Federal labor law, which is 55 years for women and 60 years for men, since they receive state retirement pension and are less motivated financially for being employed. I further exclude individuals who are retired by any reason other than age and receive other state pensions. Among those respondents who are currently unemployed, only those who have experience of being employed and did not lose their job voluntarily are included in the sample. Individuals who left their job voluntarily are excluded to reduce the possibility of unemployment endogeneity.

Principal Findings:

Unemployment increases the likelihood of reporting depression by 3.9% for men and by 3.4% for women. As for the impact of duration of unemployment, the effect has a smaller magnitude for a short period of unemployment for women, which increases for the duration of up to 12 months and then decreases again, which supports previously established staged model of unemployment. Unlike women, young men can even experience a positive effect of unemployment on their self-reported mental health in the short-term. Both young and the older men have a greater magnitude of an unemployment impact on self-reported depression in the long term.

Conclusions:

This paper finds that involuntary unemployment has a positive and statistically significant effect on the occurrence of depression both for men and women. The effect of the unemployment duration is different for men and women. Women tend to adapt to their unemployment status as the time goes, while men are more likely to experience depression because of the long-term unemployment.

Implications for Policy or Practice:

Current results show that since there exists a positive relationship between unemployment and self-reported mental health, individuals assign a high positive value to the fact of being employed. This means that public health costs of unemployment are significant for Russia, and unemployment protection schemes and assistance should be improved.