Unbiased Analysis of Today's Healthcare Issues

Effect of job loss on physical and mental health

Written By: Jason Shafrin - Sep• 26•16

Previous research has found that losing your job has an adverse effect on your physical and mental health.  Because losing your job is endogenous, often studies of this sort look at plant closures as an individual’s job loss is largely uncorrelated with individual performance.

An interesting paper by Schiele and Schmitz (2016) take this a step further by conducting a quantile regression and looking at how job loss effects physical and mental health based on baseline health status.  They find:

Job loss due to plant closures affects physical health adversely for individuals in the middle and lower part of the health distribution while those in best physical condition do not seem to be affected. The results for mental health, though less distinct, point in the same direction. We find no effects on BMI.


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