The Psychological Cost of the Great Recession

There are a lot of statistics that can tell you how bad the 2008 financial crisis was.

In the US, unemployment almost doubled. More than half the country saw their total wealth go down. The average person was working a record-low 33 hours a week.

The psychological effects of the economic crisis are harder to measure, but they’re just as real. Several studies have tried to figure out what impact the stress and uncertainty of those years had on the mental health of the population at large.

Most recently, researchers from Italy published a systematic review of 19 studies looking at the relationship between the 2008 global recession and workers’ mental health. They found that overall, there was evidence the economic crisis had significant psychological repercussions.

In particular, four factors showed up as especially important for mental health outcomes:

  • Unemployment
  • Having to work more
  • Losing staff
  • Wage cuts

Taken together, the studies reviewed showed that these trends were related to several kinds of mental health problems:

  • Anxiety
  • Depression
  • Dysthymia
  • Mood disorders in general
  • Suicide

In other words, people worked longer hours not just for lower wages but for worse mental health. Some of the studies suggested a link to general health problems like cardiovascular and respiratory diseases as well.

To make matters worse, budgets were also being cut during this period, reducing funding for health services. Several studies included in the review documented problems like shortages in medical supplies and decreased access to services that added to the health effects of the economic crisis.

This isn’t the first work to point out the problem with cutting funding for mental health services at precisely the time when people are under the most stress. As a review published last year put it:

Just when people have the highest need for mental help, cost-cutting measures in the health care sector lead to a (substantial) drop in the supply of services for the prevention, early detection, and cure of mental health problems.

Of course, we’ve known for a long time that both stress and poverty are related to worse mental and physical health. But the more research is done, the more we’re finding out that the way our economy functions on a societal level has real consequences for our psychological well-being.