Job loss and mental disorders: International evidence from the early stages of COVID‐19 outbreak

Abstract

Using a rich individual level dataset from six countries, we examine the relationship between job loss and mental disorders during the first phase of the COVID‐19 pandemic. We consider four indicators of mental disorders based on their severity, viz. anxiety, insomnia, boredom, and loneliness. We draw our conclusions based on two groups of countries that differ by the timing of their peak infections count. Using a logit and a two‐stage least squares (TSLS) regression methods, we find that the people who lost their jobs due to the pandemic are more likely to suffer from mental disorders, especially insomnia and loneliness. Additionally, people with financial liabilities, such as housing mortgages, are among those vulnerable to anxiety. Women, urban residents, youth, low‐income groups, and tobacco users are more prone to mental disorders. The findings from this research have significant policy implications on infectious disease control measures and mental health conditions due to lockdowns and social distancing.