The Great Recession and Mental Health: the Effect of Income Loss on Depression Scores of Young Mothers

Introduction:

Studies of the effects of economic shocks on health have shown different conclusions about the nature of the recessionary-health relationship. This lack of a consensus may be due to the variations in size and type of recession. While unemployment was seen in most high income countries during the Great Recession, economic downturns also reduce real income. Furthermore, in Ireland and the United States the financial crisis also triggered mortgage distress. Actual or threatened loss of a home can lead to depression and poor mental health.

Methods:

I use data from the first three waves of the infant cohort Growing Up in Ireland study to examine the effect of income loss on the mental health of young mothers. The timing of the three waves encompasses the period of the financial crisis. I take a fixed effects approach to examine changes in total depression score (CES-D), and I also examine changes for the subgroups of mental health that make up the total score. This allows me to differentiate between feelings of failure and fear for the future, and symptoms consistent with sadness and the ‘blues’. I examine the effect of income loss on these measures mental health, and I then examine if this effect is due to the tenancy status of the respondent, or to their income status in the pre-recessionary period.

Results:

A balanced panel of 6821 households is used in this study, and the individual of interest is the biological mother of the study child.

The results of the fixed effects model show that income loss is associated with an increase in depression (-.245**). When the tenancy status of the individual is taken into account income loss is associated with depression for owners who have a mortgage (-.317***). This effect of income loss is not seen for those who rent from local authority, private owners, parents, or occupy their homes free of rent. When the income quintile of the individual is included, it is seen that those who were in the wealthiest income quintile in wave 1 have an increase in depression associated with income loss (-.253*). This is not seen for the other income quintiles. There is also an association between being in mortgage or rent arrears and an increase in depression (.159**). When the total depression score is broken down into symptoms of depression, income loss is associated with symptoms of being depressed (-.043*), failure (-.031**) and fear (-.04*) but not loneliness, crying, or being sad. However, income loss for those who pay a mortgage was associated with the ‘blues’ (-.036*), feeling depressed (-.05) failure (-.032**) fear (-.053**), restless sleep (-.068**) and being sad (-.044*).

Conclusion:

The results indicate that the Great Recession had an effect on the mental health of young mothers. This was due to income loss rather than unemployment, despite the fact that unemployment is commonly used as an indicator of recessionary effect. When the effect is examined based on the tenancy of the household, income loss for mortgage owners was associated with depression.