Background. The COVID-19 pandemic has major ramifications for global health and the economy, with growing concerns about economic recession and implications for mental health. Here we investigated the associations between COVID-19 pandemic-related income loss with financial strain and mental health trajectories over a 1-month course.Methods. Two independent studies were conducted in the U.S and in Israel at the beginning of the outbreak (March-April 2020, T1; N = 4 171) and at a 1-month follow-up (T2; N = 1 559). Mixedeffects models were applied to assess associations among COVID-19-related income loss, financial strain, and pandemic-related worries about health, with anxiety and depression, controlling for multiple covariates including pre-COVID-19 income.Findings. In both studies, income loss and financial strain were associated with greater depressive symptoms at T1, above and beyond T1 anxiety, worries about health, and pre-COVID-19 income.Worsening of income loss was associated with exacerbation of depression at T2 in both studies.Worsening of subjective financial strain was associated with exacerbation of depression at T2 in one study (US).Interpretation. Income loss and financial strain were uniquely associated with depressive symptoms and the exacerbation of symptoms over time, above and beyond pandemic-related anxiety.Considering the painful dilemma of lockdown versus reopening, with the tradeoff between public health and economic wellbeing, our findings provide evidence that the economic impact of COVID-19 has negative implications for mental health.

Background. The COVID-19 pandemic has major ramifications for global health and the economy, with growing concerns about economic recession and implications for mental health. Here we investigated the associations between COVID-19 pandemic-related income loss with financial strain and mental health trajectories over a 1-month course. Methods. Two independent studies were conducted in the U.S and in Israel at the beginning of the outbreak (March-April 2020, T1; N = 4 171) and at a 1-month follow-up (T2; N = 1 559). Mixed-effects models were applied to assess associations among COVID-19-related income loss, financial strain, and pandemic-related worries about health, with anxiety and depression, controlling for multiple covariates including pre-COVID-19 income. Findings. In both studies, income loss and financial strain were associated with greater depressive symptoms at T1, above and beyond T1 anxiety, worries about health, and pre-COVID-19 income. Worsening of income loss was associated with exacerbation of depression at T2 in both studies. Worsening of subjective financial strain was associated with exacerbation of depression at T2 in one study (US). Interpretation. Income loss and financial strain were uniquely associated with depressive symptoms and the exacerbation of symptoms over time, above and beyond pandemic-related anxiety. Considering the painful dilemma of lockdown versus reopening, with the tradeoff between public health and economic wellbeing, our findings provide evidence that the economic impact of COVID-19 has negative implications for mental health. Funding. This study was supported by grants from the National Institute of Mental Health, the US-Israel Binational Science Foundation, Foundation Dora and Kirsh Foundation.