Whose mental health declines during economic downturns?

Prior research shows that economic downturns are associated with increases in mental illness. However, we know little about whose mental health is most negatively affected. Is it the young or old, men or women, employed or non-employed, rich or poor? Using an 18-year panel dataset of Australians, we contribute to this understanding by estimating the impact of changes in unemployment on mental health, separately by population subgroups. Our mental health measure captures psychological distress and emotional difficulties, which are often missed by infrequent event indicators such as suicides. We find that young women suffer most during economic downturns. Men and women of older ages are not significantly affected. The effects for young women are driven by those in insecure employment, and those from low socioeconomic backgrounds. Our results suggest that public health programs should emphasize the mental health of young women during economic downturns.