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Workers' Compensation

The Psychological Impact of Unemployment

Unemployment, particularly when unexpected or involuntary, may take its toll on mental health. A large body of scientific evidence demonstrates convincing evidence that unemployed people manifest lower levels of psychological well-being than do their employed peers.

Unemployment has been linked with a number of psychological disorders, particularly anxiety, depression, and substance abuse; dangerous behaviors including suicide and violence toward family members or others also correlate with unemployment. These associations hold true not only in surveys of those already unemployed but also in studies that follow one or several individuals with no psychological difficulties into a period of unemployment. Such findings have been reported from many industrialized nations and, with some minor variations, apply to workers of both sexes and all ages.

Research regarding the consequences of unemployment may be confounded by a commensurate loss of income in subjects being studied. However, some studies try to account for this phenomenon of drop in socioeconomic status. Although an alert health care system may provide some needed assistance, resolution of the problem lies outside the field of medicine.

Supporting evidence regarding the association between unemployment and psychological trouble comes primarily from studies of populations--epidemiologic studies--that show a significant relationship between unemployment and psychological stress on every scale, from neighborhood or workplace cohort to entire continents. Research on unemployed individuals, especially when it has been possible to follow them longitudinally over a period of time spanning unexpected job loss, further supports the idea of a close connection.

Although there are variations specific outcomes, these findings generally seem to hold for all industrialized countries that have been studied.  The data are also valid across gender and age barriers.

History and Definition

Unemployment often results from a complex and interwoven set of economic, social, or political forces that are well beyond the reach of the medical practitioner. The health care system as a whole can only respond to the effects of this external pressure. Thus, interest in joblessness as a public health concern has grown rapidly since the mid-1970s, reflecting the widespread and sustained growth in levels of unemployment in most industrialized countries.

In the period between 1960-1973, unemployment in G4 Europe (France, West Germany, Italy, and UK) was 2.6%.  Reflecting a steady rise in the absolute and percentage numbers of unemployed, G4 Europe (now including a united ) posted a 9.4% unemployment between 1990-2000.  While the has been spared this dramatic change in unemployment rates until recently, many studies in the focus on particular regions or particular industries in which unemployment has increased or has occurred unexpectedly.

In discussing the psychological effects of involuntary unemployment, it is important to remember that the term unemployment is used in a variety of ways. The lack of employment for individuals who possess the capacity to perform work may meet the most common definition.  However, this lumping of all individuals who are not working may miss the mark.  Not all individuals capable of work are actively seeking jobs. For example, a 19-year-old college student half-heartedly looking for summer work may be ''unemployed'' in the standard sense of the word but may not suffer the same psychological stress as a mid-level manager who is laid off unexpectedly after many years on the job.

Some individuals, particularly in dire economic circumstances, may find themselves “underemployed” in positions below their capacity or training level.  This latter group would not be included as unemployed but may suffer similar stress factors such as inadequate financial compensation, lack of benefits, or loss of prestige.  A recent college graduate who has taken an unpaid internship during the day while waiting tables at night may suffer psychological stress that is indistinguishable from that experienced by the unemployed.

Providing a satisfactory definition of psychological well-being is also a considerable challenge. The American Psychiatric Association's Diagnostic and Statistical Manual of Mental Disorders (2000), popularly known as DSM-IV-TR, stresses the difficulty of adequately specifying precise boundaries for mental health and mental disorder. However, earlier editions as well as the current fourth edition include the following definition of a Mental Disorder as a guide:

... a clinically significant behavioral or psychological syndrome or pattern that occurs in an individual and that is associated with present distress (e.g., a painful symptom) or disability (i.e., impairment in one or more important areas of functioning) or with a significantly increased risk of suffering death, pain, disability, or an important loss of freedom. In addition, this syndrome or pattern must not be merely an expectable and culturally sanctioned response to a particular event, for example, the death of a loved one. Whatever its original cause, it must currently be considered a manifestation of a behavioral, psychological, or biological dysfunction in the individual.

Studies of the effects of unemployment on mental health look at behaviors that are thought to demonstrate psychological distress, ranging from emergence of mental disorders and substance abuse to the commission of violent crimes and suicide. Studies also look at less overt indications, and these, too, cover a wide range, from changes in an individual's sense of self-worth to distress severe enough to require psychotropic medication. Standardized interview protocols and questionnaires that are designed to gauge an individual's psychological state are widely used in studies of the unemployed.

Isolating the Role of Unemployment

Any discussion of the health effects of unemployment must sooner or later deal with the difficult problem of separating the specific effects of unemployment itself from the effects of lowered socioeconomic status. People with financial problems, whatever the cause, may suffer from a wide variety of other illnesses, particularly but not exclusively those associated with stress. Also, unemployment almost always leads to lower socioeconomic status; in other words, it is extremely difficult to consider these as independent entities. This interdependency raises once again the question of causality, in this instance with the complication that, as a great many studies suggest, those with lower socioeconomic status are more at risk of being dismissed or leaving the workforce and have less chance of finding a new job than do those with higher status.

Some evidence exists that unemployment alone causes enough distress that biological changes take place in individuals.  An Austrian study found that levels of the stress hormone cortisol were elevated in a sample of unemployed individuals in their first year of unemployment.  As their unemployment continued, cortisol levels continued to rise (indicating continued stress).  It is noteworthy that not all of these individuals were reporting psychological symptoms.

Future Concerns

Along with the broad recognition that unemployment is harmful to the psychological health of those who are unemployed or even threatened with the possibility (including, it should be noted, members of the medical profession) is an understanding that its effects may be lasting.

On the individual level, it is possible that a stretch of unemployment cannot be considered simply as an episode; those studies that follow the unemployed for even a short time show that unemployment can precipitate a series of events that can affect someone far into the future, even after finding new work. It also seems clear that a person who was once unemployed is at a greater-than-average risk of being unemployed again.

On the societal level, the available research raises more questions than answers. One follow-up study of a group of workers who were initially tested two years earlier because they had been unemployed more than 12 weeks found that a diagnosis of psychiatric difficulty meant a 70 percent reduction in the individual's chances of obtaining a job, while those with normal performance on psychometric testing were two to three times more likely to find re-employment.

Such findings have led to worry about a ''vocationally handicapped'' group eventually putting a heavy burden on social services. The need for individual suffering mental disorders in the context of unemployment to receive prompt and effective treatment appears paramount in their journey towards reemployment. A variety of therapeutic approaches are available, including (but not limited to) individual psychotherapy, group psychotherapy, vocational rehabilitation, incentive work therapy, medication if necessary, and hospitalization or intensive day treatment programs. Early intervention not only addresses the real problem of psychological harm from unemployment but may also serve to reduce the financial burden on society in the long run.

The cure for unemployment, of course, is work--indeed, on the straightforward premise that work is good for mental health, it can be argued that work should be one aspect of community efforts to help psychiatric patients. Occupational health programs, working in cooperation with community social services, could help prevent at least some of the harmful effects on the family by working with individuals. It could also help prevent some of the effects on the community when significant numbers are unemployed. As policy-makers allocate resources to the unemployed, the opportunity to return to the workplace should be encouraged and supported.

 © Copyright 2009 Matthew Bender & Company, Inc., a member of the LexisNexis Group. All rights reserved. This article was excerpted from Occupational Injuries and Illnesses.