Thank you, Mr. Chair and members of the committee.
I'm honoured to have the chance to share some thoughts based on research I have co-authored with my colleagues, Art Goldsmith of Washington and Lee University, William Darity Jr. of Duke University, and Darrick Hamilton at The New School, regarding connections between poverty, unemployment, and mental health. In addition, my comments are also informed by my work as a faculty member for Washington and Lee University's Shepherd program for the interdisciplinary study of poverty and human capability.
I have listened to portions of the recent meetings of this committee and have been impressed by both the quality of the witnesses and the questions from members. I hope my comments will be helpful in the important work of this committee.
Psychologists and sociologists have argued as far back as the 1930s that unemployment damages emotional health and undermines the social fabric of society. Psychologists draw a conceptual connection between involuntary joblessness and mental health in numerous ways, such as incomplete psychosocial development, feelings of helplessness brought on by a perceived lack of control, and failure to obtain the non-monetary benefits of work.
Erikson postulates that healthy personality and emotional development during adulthood requires that a person believe they are making strides to enrich themselves by contributing to their family and community. Otherwise, self-esteem is compromised, leading to anxiety and self-doubt. Seligman asserts that feelings of helplessness arise when a person believes they have little influence over important events in their life, such as securing meaningful work. In his view, prolonged helplessness can lead to depression. Jahoda contends that unemployment is psychologically destructive because it deprives a person of the valued, but unobserved, by-products of employment, including a structured day, shared experiences, and status.
A widespread conviction in psychology is that the response to stressful events, such as unemployment, takes the form of a progression through stages. Shock tends to characterize the initial phase, during which the individual is still optimistic and unbroken. As unemployment advances, the individual becomes pessimistic and suffers active distress, and ultimately becomes fatalistic about their situation and adapts unenthusiastically to their new state.
The unemployed are expected to exhibit poorer mental health due to elevated levels of anxiety, frustration, disappointment, and alienation. Moreover, these feelings are likely to be more pronounced among those who shoulder greater financial responsibilities and persons with a greater sense of self-efficacy fostered by prior success in a host of domains, including school and work. Thus, the highly educated are particularly vulnerable to the debilitating emotional consequences of unemployment. A host of factors may buffer the adverse psychological impact of involuntary joblessness, including an understanding spouse, parents, siblings, adult children, and friends.
Social scientists from a range of disciplines have provided cross-sectional evidence of a connection between unemployment and various indicators of mental health; however, these researchers recognize the potential for reverse causality, where poor mental health can lead to joblessness and thus call their results into question.
Numerous researchers attempt to address this problem by examining persons who switch over time from work to unemployment; however, their findings supporting the link between unemployment and a decline in emotional well-being, although compelling, are not definitive evidence of a causal link, because something unobserved by the researcher may have changed before the onset of unemployment that damaged a person's emotional well-being, such as disappointments at work or unexpected health problems. A second shortcoming identified by Kessler, Turner and House in conventional studies using both cross-sectional and panel data is the selection into unemployment on the basis of prior mental health. This makes it challenging to decipher if unemployment causes poor mental health.
In a recent study, my colleagues and I apply a new strategy to address both of these concerns. We first restrict our analysis to individuals who have never had bouts of poor mental health prior to the last 52 weeks.
This strategy reduces the likelihood that poor mental health causes the unemployment. It also allows us to interpret the effect of unemployment on emotional health for an individual in good mental health prior to the unemployment spell. Note, however, that our results will apply only to this particular subsample. I should also note that all of this is using data from within the United States, and we're always concerned about applying results from one country onto another country.
Second, we separate those in the sample into three groups based on their employment history over the past year, or 52 weeks: those who are employed the entire period, those experiencing less than 26 weeks of unemployment or what I call the short-term unemployed, and those experiencing 26 or more weeks of unemployment or the long-term unemployed. This allows us to test the hypothesis that short-term bouts of unemployment are less traumatic than are longer spells. Our results shed light on a number of key issues, and can be interpreted as causal with greater confidence than can existing findings in the literature.
First, we add to the evidence that long-term unemployment has large negative effects on mental health. Second, the negative effects—again this is in the context of the United States—are larger for black and Latino individuals. Third, short-term unemployment does not significantly harm mental health. Fourth, the potential buffers I mentioned earlier do not appear to substantially change the odds of suffering from poor mental health. Finally, those with more education suffer a larger emotional penalty for being long-term unemployed.
The body of evidence offered by social scientists, including psychologists, suggests that to ignore mental health costs is to understate the negative effects of long-term unemployment. Thus, public policies aimed at improving labour market performance should account for the mental health costs of joblessness. Our research highlights the importance of implementing policies and programs that reduce unemployment, especially long-term unemployment. Moreover, public policy should be mindful of the support needed by those who are long-term unemployed.
Unemployment is not the only traumatic event associated with negative effects on mental health. In a series of studies with the same co-authors mentioned earlier, I've examined the effects of other traumas, namely, sexual assault, violence at the hands of parents, violence by others in the community, and stalking. All of these traumas, whether experienced as a child or as an adult, are associated with either current or subsequent negative effects on mental health, happiness, and education outcomes for children. We examined those in separate papers.
Unfortunately, these traumas are associated with being in poverty. All of this evidence highlights the importance of taking a full accounting of all the costs associated with poverty. This suggests that while effective tools for fighting poverty may require significant resources on the part of government, the alternative—more people in poverty—carries significant monetary and non-monetary costs to government, individuals, and society as well.
Thank you, Mr. Chair and members of the committee. I look forward to your questions.