Job displacement and the mental health of households: Burden sharing counteracts spillover

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Authors:

Zhao, Yuejun

Year:

2023

Reference:

Labour Economics

Summary

In this paper, I investigate the mental health effects of job displacement in 1-adult and 2-adult households. In a 1-adult household, if a worker loses a job unexpectedly, significant mental health deterioration can become manifest. In a 2-adult household, the deterioration may be less severe for the displaced worker due to burden and risk sharing with the partner. However, in this 2-adult household, there exists the additional risk of the partner’s unemployment, which could be detrimental to the worker’s mental health. I compare the overall burden in 1- and 2-adult households and find no statistically significant difference. This follows because the distress associated with the partner’s displacement is offset by the lower distress upon own displacement. Regarding gender differences, I show that job displacement upsets male and female workers for different reasons and to different extents depending on partnership status. These results offer fresh insights into unemployment shocks, the crucial role of partner support, and how the gender gap in mental health can be linked to household structure.

JEL:

I12; J12; J64

Keywords:

Shared burden Involuntary job loss Mental well-being Household composition Gender heterogeneity

Project: