UNEMPLOYMENT AND MENTAL-HEALTH - A LONGITUDINAL ANALYSIS

The cost of unemployment may be broken down into two components: economic and social costs. This paper considers one aspect of social costs: the relation between unemployment and health. It makes use of panel data collected in a survey specifically designed to analyse this relation. These data enable us to construct a validated measure of mental health. Using a fixed effects model, we show that the risk of deterioration of mental health is greater among the unemployed. This may generate long-term effects leading to withdrawal from the labour market and greater dependency on social welfare programs. -English summary