Economic Context and the Health Effects of Unemployment

Abstract

Most studies of the health consequences of unemployment ignore the economic context within which job loss occurs. Using data from a subset (N = 1,252) of a national probability sample, this paper compares the effects of current and previous unemployment on depression and subjective physical health status across levels of educational attainment and local job availability. Results show that current unemployment effects among the previously unemployed are strongest in low unemployment areas, particularly among individuals with a college-level education. These findings are interpreted in terms of the two categories of unemployment-related stress most frequently identified in the literature: financial strain, which is thought to be more salient for people in lower socioeconomic statuses, and damage to sense of self, which may primarily characterize higher status victims of job loss.