Thompson Rivers University

Recessions don’t cause only higher unemployment but they cause depression too. Evidence from Canada

  Posted on: November 25, 2015

Dr. Latif, Associate Professor of Economcs at Thompson Rivers University used longitudinal Canadian data from the National Population Health Survey (1994-2006) in order to examine the impact of the provincial unemployment rate on mental health as measured by the short form depression scale. After controlling for the unobserved individual specific factors study found that, for the overall model, provincial unemployment rate has a significant positive impact on depression. The study further examined the impact of unemployment rate on depression for a number of sub-groups based on gender, age, marital status, and education. His results suggest that the impacts of unemployment rate on depression are heterogeneous across different sub-groups. The results of this study have important policy implications. Previous studies suggest that mental stress may lead to risky health behaviours such excessive drinking, substance use, and smoking. These risky health behaviours may have long term health consequences in terms of chronic conditions such as heart disease, cancer, etc. Thus policy makers may consider taking appropriate steps to provide mental health support during the period of recession. Such support may also be helpful for the unemployed individuals who are too depressed to search for job.