The Great Recession and Children's Mental Health in Australia.

Melisa Bubonya,Stephen Zubrick,Sarah Johnson,Deborah Cobb-Clark,Daniel Christensen

doi:10.3390/ijerph16040537

Abstract

This paper analyzes the effects of “shocks” to community-level unemployment expectations, induced by the onset of the Great Recession, on children’s mental well-being. The Australian experience of the Great Recession represents a unique case study as despite little change in actual unemployment rates, levels of economic uncertainty grew. This affords us the ability to examine the effects of shocks to economic expectations independent of any actual changes to economic conditions. We draw on and link data from multiple sources, including several waves of the Longitudinal Study of Australian Children (2004–2010), a consumer sentiment survey, and data on local economic conditions. Using our purpose-built data set, we estimate difference-in-differences models to identify plausibly causal effects. We find, for boys, there is no detectable effect of community-level unemployment expectations shocks on mental health. For girls, however, there are modest increases in mental health problems and externalizing behaviors, as measured by the Strengths and Difficulties Questionnaire (SDQ). We additionally find no discernible change in mother’s psychological distress as a result of expectations shocks. These results are stable after controlling for actual labor market conditions.

Highlights

IntroductionThere is an extensive literature examining the effects of economic conditions on population health
There is an extensive literature examining the effects of economic conditions on population health.In seminal work, Ruhm [1] found economic downturns in the United States to be associated with reduced mortality due in large part to a reduction in preventable deaths
The DID coefficient shows that, on average, there is no significant difference in boys’ parent-rated Strengths and Difficulties Questionnaire (SDQ) scores as a result of the Great Recession, regardless of whether local labor market conditions are controlled for

Summary

Introduction

There is an extensive literature examining the effects of economic conditions on population health. Ruhm [1] found economic downturns in the United States to be associated with reduced mortality due in large part to a reduction in preventable deaths. Subsequent researchers found mortality to be procyclical in other countries, though the findings from more recent studies are much less conclusive [2,3]. Researchers typically parameterize economic downturns using changes in labor market conditions (e.g., unemployment rates, mass layoffs), the relationship between macroeconomic conditions and population health holds more generally, including when the focus is on macroeconomic factors such as GDP and home foreclosure. Economic crises can be associated with chronic stress for many people which can produce both adaptive and dysfunctional

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