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Workers' Compensation

Surviving the Great Recession: Getting By With a Little Help From Our Meds

By Karen C. Yotis, Esq. and Robin E. Kobayashi, J.D.

It’s a no brainer that when the economy takes a deep dive, our collective psychological well-being also ends up under water. Just reading about mass layoffs, homeless families, and bankruptcies—much less taking a drive past the dead storefronts in ghost towns across America and witnessing the devastation block after empty block—serve as a constant reminder of the precarious state of our country’s economy.

Quite a vast literature exists to document the bright line relationship between unemployment and a host of mental health disorders. These prior studies, which have generally focused on the psychological well-being of the unemployed, have been supplemented by several other studies which report that the survivors of layoffs are generally better off from a mental health perspective than their jobless counter-parts. But when it comes to mental health, do the experiences of the somewhat more fortunate nevertheless suggest that the impact of the recession may extend far beyond the direct effect of unemployment?

A new study published in the American Journal of Public Health has found that the recession’s negative effects on mental health may indeed extend to the ranks of the employed, a group considered by prior research to be at a lower risk of psychological distress. This study examined the impact of the recession on the mental health of “less stably employed” individuals, in particular the specific effects of “increased job insecurity, feelings of powerlessness, increased workload, changes in job scope . . . as well as anger or sympathy for laid-off coworkers.” Providing evidence that the folks who kept their jobs during this bleak period nevertheless experienced worsening mental health, the study concluded that the consequences of the Great Recession on the mental health of the U.S. workforce were widespread. [See Modrek, S. et al., Psychological Well-Being During the Great Recession: Changes in Mental Health Care Utilization in an Occupational Cohort, American Journal of Public Health, Vol. 105, No. 2, pp. 304-310 (Feb. 2015).]

How the study was set up

Using data from the period 2007 to 2012, the study focused on a U.S. manufacturing firm with 25 large plants located in 15 states that provided health insurance benefits (including mental health services) to its employees.

This manufacturing firm experienced “significant downsizing events” during the peak of the Great Recession (2008-2009). In January 2009 it announced plans for a 13% reduction in its workforce. The layoffs eventually ended after March 2010, but the firm continued hiring and pay freezes through 2013.

The study analyzed the yearly number of mental health inpatient and outpatient visits based on detailed claims data for 11,625 continuously employed and insured workers from 2007 to 2010. For this particular group 1, the study examined short-term changes.

Interestingly, the study went a step further and analyzed 10,242 workers who were employed and insured from 2007 to 2012 to determine whether the changes in mental health services utilization continued with the improvement of the economy in 2011-2012. For this particular group 2, the study examined medium-term changes.

The study also concentrated on the prescriptions filled for opiates, antidepressants, sleep aids, and anxiolytics, reasoning that “job stress is related to the onset of generalized anxiety disorder and depression,” while “sleep disorders and drug abuse are often precursors to depression.” Opiate use was examined with an especially vigilant eye because of the known relationship between stress and “a wide variety of psychosomatic illnesses, including chronic pain.”

For purposes of this study, a plant location that experienced a mass layoff where 40 or more employees lost their job on a single day was considered a “high-layoff plant.” The study assumed that the surviving employees who remained in their jobs at 7 such plants experienced more job insecurity than the employees at the other 18 plants that were not deemed to be a “high-layoff plant.”

The control variables consisted of the yearly county-level unemployment rate reported by the Bureau of Labor Statistics and the unemployment rates for the county where each of the 25 plants were located.

Key findings and facts

To document that remaining workers had better overall health and significantly less use of mental health services and medications in the years before the recession, the study first compared the baseline utilization differences of the remaining employed in groups 1 and 2 with the workers in group 3 who left their jobs between 2008 and 2010. This analysis confirmed that the unemployed workers in group 3 had a higher pre-recession use of in-patient and out-patient mental health services and higher medication use.

In spite of these baseline conclusions, workers who kept their jobs nevertheless increased their use of mental health services and medications immediately after the economic downturn, and they continued to use an increased amount of medication even after the economy began to improve.

While the study found only a marginally significant increase in employed workers’ use of in-patient mental health services in 2009 to 2010 from 2007 to 2008, the magnitude of the post-recession trend line was approximately four times greater than the pre-recession trend line in the short term. Both trend lines were almost identical in the medium term, “suggesting that the increase in inpatient visits was abrupt and short lived.” (emphasis supplied)

The results for out-patient use told a more disturbing story. A comparison of the utilization trends between 2007 to 2008 and 2009 to 2010 suggested a statistically significant increase in employed workers’ use of out-patient mental health services. Unlike the results for inpatient services, the trend for outpatient services remained elevated and significant as between the annual increases of 2009 to 2012 and 2007 to 2008, although the magnitude of use was substantially reduced for group 2.

The changes noted in utilization of mental health medications after 2009 were particularly telling. The study results in the short term clearly showed that workers used more opiates, antidepressants, sleep aids and anxiolytics in 2009 to 2010 than they did in 2007 to 2008. In the medium term, the study results also indicated an increased trend for using antidepressants and sleep aids—which remained particularly significant in the high-layoff plants—although the magnitude of the increase was smaller. The study pointed out that “the increasing trend in the use of antidepressants in the post-recession period was particularly notable because of the decreasing trend in antidepressant use before the recession.” And although the study found no trend difference for sleep aids, anxiolytics or opiates at high-layoff locations in the long term, “in the models that accounted for differences by plant-level job security, changes in county-level unemployment rates were robustly related to increased use of opiates and sleep aids.”

This study actually helped the researchers to reconcile divergent results from their prior studies which found an insignificant increase in new depression diagnoses and only slightly elevated self-reported work stress at high-layoff plants. The current study’s findings of increased use of mental health services in the short run, with a prolonged increase in the use of antidepressants and sleep aids at the high-layoff plants suggested to the researchers that looking at new diagnoses for depression may have been too stringent of a measure to capture the more subtle changes in psychological distress. The study notes that this information is particularly illuminating because “surviving workers should have been the least affected by the economic downturn, yet our study showed that this health population also experienced adverse mental health outcomes.”

Study limitations

While this study had the advantage of access to the type of detailed data necessary to examine minute changes in the use of mental health services and medications over a prolonged period of time, as well as a large sample size combined with continuous measures of the outcomes, certain limitations did exist.

First, the study sample was limited to workers in the heavy and light manufacturing industries, which were hit particularly hard by the Great Recession. Consequently, employees in other sectors of the workforce could have had different experiences.

In addition, although the study examined yearly medication supply, it could not determine whether workers actually took the prescriptions that they filled.

Further, although the study did have a relatively large sample size, the sample was not significant enough to determine whether workers’ increased use of medication was caused by pre-existing mental health problems.

Finally, the study results may have underestimated the true effect of the recession on remaining workers. By selecting study subjects who were employed throughout the recession, the study could have limited generalization to the general US working population that was less stably employed and which may have experienced greater effects from the recession.

Expert Commentary

To get an industry perspective on the effect that the recession has had on the nation’s workforce, we asked Charles R. Davoli, Esq., immediate past president of the Workers’ Injury Law & Advocacy Group whether WILG and/or its members witnessed during the Great Recession and the years immediately following it any increase in the filing of workers’ compensation claims by workers employed in highly unstable jobs. Davoli stated:

“Generally in a period of recession workers’ compensation claims go up. Whether this is because people who have been injured tend to not want to lose their jobs and are reluctant to file claims when business is good, is not always clear. So the rise of claims during a recession may be because the reluctance is gone, and not necessarily because more workers are suffering from psychological impairment. But the popular sentiment that you make your claim during a recession when your job is insecure, well this is nonsense. Either you have a claim or you do not have a claim.”

Highlighting another significant impact of the Great Recession that could conceivably add to the psychological distress experienced by the workforce, Davoli also commented that:

“The recession does have an impact on a workers’ ability to return to work because there are not as many job opportunities available regardless of a workers’ functional capacity. Whether you are hurt or you are not hurt, the real impact is whether those same employers that have downsized their workforce because of a recession are the same employers who do not have a lot of employment opportunities for injured workers who can’t come back to work.”


A study that provides evidence that workers who remained employed during the Great Recession experienced increased use of mental health services and continued to take a lot more meds even after the downturn began to reverse, has far reaching effects on the workforce, because (as the study takes pains to point out) we can anticipate that future downturns will occur, even as the economy inches back from the brink. Accordingly, the study recommends that employers be aware of the negative consequences of layoffs on their remaining workforce. The study also suggests that physicians be more vigilant in assessing the stability and other factors in a patient’s work environment when diagnosing and treating mental health issues. With more accurate information about the psychological state of employed individuals during and after an economic downturn, employers may be able to help their stressed out workers to get by a little better with employee assistance and targeted wellness programs, and additional transparency when communicating bad news.

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