Unemployment and mental health: evidence from research in the Nordic countries

In this article we examine research on effects of unemployment on mental health in Denmark, Finland, Norway and Sweden. We describe studies that use cross-sectional, longitudinal and time-series data, and we discuss studies that investigated the duration-dependence issue in exit rates out of unemployment. Not surprisingly, cross-sectional studies reveal that unemployed persons have worse mental health than do others. Most longitudinal studies suggest that unemployment is associated with deteriorating mental health, even though it is somewhat unclear how long such an effect persists. Most duration-dependence studies were done using Swedish data. It turns out that unemployment benefits and labour-market policies affect the pattern of exit rates out of unemployment.