Impact of early COVID-19 job loss on later mental health uncovered

By Priyanjana Pramanik, MSc.Reviewed by Lily Ramsey, LLMAug 2 2024

In a recent study published in JAMA Network Open, researchers investigated how income or job loss during the initial phases of the coronavirus disease 2019 (COVID-19) pandemic is linked to subsequent psychological distress.

Their findings indicate that individuals experiencing income or job loss showed significant levels of higher psychological distress after 29 months, highlighting the necessity of supportive policies to alleviate long-term mental health consequences of economic disruptions.

Study: Income or Job Loss and Psychological Distress During the COVID-19 Pandemic. Image Credit: Miljan Zivkovic/Shutterstock.com

Background

The pandemic caused a significant increase in unemployment, peaking at over 14% in the U.S. by April 2020. These losses were not evenly distributed; younger, less-educated, minority groups, women, and low-wage workers were more affected.

While higher-wage workers regained employment within two months, lower-wage workers still faced a 13% employment gap by December 2021. The economic downturn also led to a rise in mental health issues, particularly among those with lower incomes and fewer savings.

Previous studies have shown that financial crises, including the Great Recession and other periods of job loss, are linked to poorer mental health. However, many of these studies did not consider factors influencing job loss and mental health.

Few studies using robust methods to estimate causal effects have focused on U.S. working-age adults during the pandemic, and their findings have been mixed.

As enhanced financial support expired in September 2021, there is a need for more research on the long-term mental health impacts of pandemic-related job loss.

About the study

The study explored the link between early income loss during the pandemic and psychological distress over two years later among U.S. working-age adults. Data came from the Pew Research Center's American Trends Panel, which included five survey waves from September 2019 to September 2022.

The study focused on adults between 18 and 64 who did not report experiencing job or income loss before March 2020. Participants reported their mental health, including feelings of depression, anxiety, loneliness, and sleep issues, as well as economic status during the pandemic.

Researchers used a quasi-Poisson model, which helped estimate how job loss is linked to psychological distress, accounting for variations that might not be evenly distributed across the population.

The analysis adjusted for demographics, pre-pandemic financial status, and pre-existing mental health conditions to ensure a more accurate assessment of the impact of job loss.

To further refine their analysis, the researchers used propensity score weighting. This method balances the comparison groups by controlling for differences that could affect both the likelihood of job loss and mental health outcomes, providing a more reliable estimate of the causal impact of job loss on mental health.

The study assessed psychological distress scores first in February 2021 and subsequently in September 2022, comparing those who experienced early-pandemic job loss with those who did not.

Findings

The study found that early-phase job or income loss during the pandemic was linked to increased psychological distress among U.S. adults of working age more than two years later.

Of the 1,392 participants, 36% reported experiencing the loss of their job or income between March and August 2020. The sample was 47% female, 53% male, 48% aged 30-49, 12% Black, 16% Hispanic, and 63% White.

The findings indicated that individuals who experienced early-pandemic job or income loss had higher psychological distress scores compared to those who did not.

Specifically, the distress scores were 1.09 times higher as of February 2021 and 1.11 times higher in September 2022.

This corresponds to an increase in distress scores of 0.42 points and 0.52 points, respectively. The study accounted for potential confounding factors and estimated that any unobserved confounder would need to be significantly associated with job loss and psychological distress to negate these findings.

Overall, the results highlight the long-term mental health impacts of economic disruptions caused by the pandemic.

Conclusions

The study found that job or income loss during the early stages of the pandemic was associated with a 9-11% increase in psychological distress among U.S. working-age adults more than two years later. This highlights the possible long-term mental health impacts of economic disruptions.

The findings align with other studies showing similar associations, though the effects were somewhat moderated by generous pandemic-related financial support.

The study's limitations include not considering income loss before March 24, 2020, potential unobserved confounders, and a broad exposure definition.

Further research is needed to explore how different stages of the pandemic influenced mental health. The study emphasizes the importance of maintaining employment and financial stability to support mental health during large-scale events.