Opinion: the shock of economic collapse and job loss will have contributed to a widespread experience of psychological distress

Unemployment makes people unhappy. It is widely acknowledged that unemployment results in a loss of income as well as declining job-related skills. In fact, it has been associated with over 100 psychological variables such as low mood, anxiety, poor cognitive performance, loss of confidence, and psychosomatic problems. Studies have found that the unemployed have lower levels of well-being than the general population and than those in work. However, these psychological impacts are often not discussed, even though job loss is comparable with other traumatic life events such as coping with divorce or the death of a spouse.

Just one month into the Covid-19 outbreak in China those who had lost jobs reported worsening mental and physical health as well as distress. An ongoing Covid-19 mental health survey in Ireland has also found high rates of anxiety, with one in four of us experiencing clinically meaningful levels of depression, and one in five experiencing anxiety and post-traumatic stress problems. While this Irish study focuses more generally on the wider psychological impact of the Covid crisis, it is likely that the shock of economic collapse and subsequent job loss will have also contributed to this widespread experience of psychological distress.

From RTÉ One's Six One News, unemployment in Ireland reached record levels in April

CSO data for April 2020 showed that there are currently 1.3 million people in receipt of an unemployment related social welfare payment. This crisis-induced unemployment may overwhelm some, triggering stress and anxiety, while many will have to deal with grief and loss, or consequences of individual or collective ill health. Acknowledging these negative well-being impacts at individual and collective levels will be an important part of our national recovery. 

We know that youth unemployment can have significant lifelong "scarring" impacts with regard to wage levels, career progression and achieving age related life goals. The early stages of our careers are formative and they help us adapt to working life, identify our interests and strengths and set the vision for our future careers. A number of economists have advised that governments should prioritise the return to work of young people as health research suggests they are least affected by the Covid-19 virus and have the motivation and skills to re-ignite the economy. Trusting the youth labour force with this responsibility would not only enable positive psychological health at individual level, but could also inspire affirmative self-esteem effects for these workers at a collective level, thus strengthening the resilience of our future labour force.

What does previous research tell us?

Studies on the psychological impact of unemployment can help us understand these individual responses and also inform the development of appropriate services to support and care for the labour force to make sure no one is left behind in the recovery. While psychological well-being is negatively affected by unemployment so too is subsequent re-employment with loss of confidence, low self-esteem and decreased job search self-efficacy, acting as multiple barriers to returning to work and affecting levels of motivation and job-seeking strategies. It is crucial to identify policy approaches which recognise these negative impacts and which seek to maintain positive psychological well-being within the labour force and mitigate long-term unemployment. 

Several theoretical perspectives help explain the relationship between unemployment and psychological well-being, all considering personal and environmental variables in their overlapping conceptual analysis.  he Latent Deprivation Model evolved from the Marienthal studies in Austria and provides rich descriptions of the impact of mass unemployment during the 1930s. It finds the psychological distress of unemployment can be explained through the loss of manifest (income) and latent (time structure, activity, social contact, collective purpose and status) benefits of employment.

From RTÉ Archives, Kieron Wood reports for RTÉ News on a 1985 conference which looked at the links between unemployment and mental and social problems. 

An alternative theory, the Agency Restriction theory, finds unemployment restricts the individual from economic self-sufficiency and reduces control over the life course, thereby impacting on psychological well-being. This assumes individuals are active agents who strive to achieve goals, initiate new activities, and have expectations for the future aligned with cultural norms, but unemployment impoverishes and discourages such agency.

Another prominent theory, Peter Warr's Vitamin model, focuses on "psychologically good" and "bad" employment and unemployment. This identified nine characteristics or features of the environment associated with positive mental health in employment including: (1) opportunity for control; (2) opportunity for skill use; (3) externally generated goals; (4) variety; (5) environmental clarity; (6) availability of money; (7) physical security; (8) opportunity for interpersonal contact: and (9) valued social position.

Warr compared their effect to that of a vitamin: a certain amount is required for good health, but too much either has no effect, or can be detrimental. Unemployment impacts on mental health by reductions in one or more of these nine categories as it generates an anxiety-provoking existence, where it is difficult to predict the future and to plan ahead.

From RTÉ Radio 1's Liveline, a discussion on the impact of long-term unemployment

These theoretical perspectives highlight aspects of work that contribute towards the greater levels of well-being enjoyed by the employed. Maintaining and preserving these dividends must form part of any policy response to unemployment. Similarly, a collective back to work campaign could promote a culture of care and hope and give the labour force (in particular low-income workers, young workers and precarious workers) confidence that should they risk returning to work as the national approach is one which supports them.

A collective back to work campaign could also build on current feelings of national solidarity to foster an appropriate national discourse that does not stigmatise or create the divisions between the employed and unemployed. We often see such divisions when an acceptable period of unemployment has past and we return to economic recovery. We know that solidarity has positive well-being effects so this could be a positive place to start.

This piece is drawn from a forthcoming report The ‘High Road’ Back to Work: Developing a Public Employment Eco System for a Post-Covid Recovery’ which has been developed by a team at Maynooth University (Dr Mary Murphy, Dr Nuala Whelan, Dr Michael McGann and Dr Philip Finn) as part of the Irish Research Council Coalesce project ACA PES (A Collaborative Approach to building Public Employment Services). It will be launched on June 5th 2020.


The views expressed here are those of the author and do not represent or reflect the views of RTÉ