University of Oulu

Amin, S., Korhonen, M. & Huikari, S. Unemployment and Mental Health: An Instrumental Variable Analysis Using Municipal-level Data for Finland for 2002–2019. Soc Indic Res 166, 627–643 (2023).

Unemployment and mental health : an instrumental variable analysis using municipal-level data for Finland for 2002–2019

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Author: Amin, Saqib1; Korhonen, Marko1; Huikari, Sanna1
Organizations: 1Department of economics, accounting and finance, University of Oulu, P.O. Box 4600, Oulu FIN-90014, Finland
Format: article
Version: published version
Access: open
Online Access: PDF Full Text (PDF, 1.1 MB)
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Language: English
Published: Springer Nature, 2023
Publish Date: 2023-09-01


We explore the effect of unemployment on mental health, using data from Finnish municipalities for the period 2002–2019. We measure mental illness using a mental morbidity index, as well as mental health care utilization and the use of antidepressants. There are significant differences across municipalities in Finland in both prevalence of mental health issues and illnesses, along with unemployment. Establishing a causal link between these two variables is challenging because of their reverse causality and joint determination. Using instrumental variable estimation, we establish a causal effect from unemployment to mental health. We present a strong connection between unemployment and mental health, especially for males between 25 and 64 years of age. Similar connection is not found among younger or older males, nor among females. Our findings are robust, since the results hold for various mental health measures. Our results reflect the possibility of differing mental health effects across the sources of unemployment.

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Series: Social indicators research
ISSN: 0303-8300
ISSN-E: 1573-0921
ISSN-L: 0303-8300
Volume: 166
Issue: 3
Pages: 627 - 643
DOI: 10.1007/s11205-023-03081-1
Type of Publication: A1 Journal article – refereed
Field of Science: 3142 Public health care science, environmental and occupational health
5142 Social policy
Funding: This work was supported by the University of Oulu Graduate School (UniOGS, https://www.oulu. fi/en/research/graduate-school) grant to Saqib Amin. The funder had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript. Open Access funding provided by University of Oulu including Oulu University Hospital.
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