Your Job Gives You More Than Money

Losing a job hurts. Everyone knows this. A new paper in Social Science & Medicine offers one of the clearest pictures yet of what actually happens to people’s mental health before and after a layoff. The findings are both intuitive and surprising.

The paper, by Olivier Bargain, Nicolas Hérault and Daniel Nettle, uses data from the Household, Income and Labour Dynamics in Australia survey. The researchers followed more than 14,000 people across 22 years and tracked over 4,200 job losses. Unlike many previous studies, this data set allowed the researchers to examine mental health quarter by quarter around the time people were let go. Relying on yearly snapshots can blur together several distinct experiences: the dread of losing a job, the layoff itself, the months of unemployment that follow and the search for a new job. This paper separates these stages more precisely.

The first major finding is that people’s mental health begins declining well before they actually lose their jobs. This might seem obvious. If you think you’re about to be fired, of course you’ll feel stressed. But the paper challenges this interpretation.

The researchers did something clever. They looked not only at whether people lost their jobs, but also whether they expected to lose them. Survey participants were asked to estimate the probability that they would be fired within the next year. Those who expected to lose their jobs showed almost the same mental-health decline—both before and after the layoff—as people who didn’t expect it. Being mentally prepared didn’t provide much protection. The effects of job loss looked remarkably similar.

This insight changes how we think about psychological resilience. One popular therapeutic view holds that people suffer less when they can mentally prepare themselves for bad news. The paper suggests that job loss doesn’t work that way. The authors point to “adverse workplace developments” such as “organizational restructuring, worsening management practice, performance pressures, heightened workload, or internal conflict.” Workers may feel these changes whether or not they consciously expect to be fired. By the time the layoff arrives, the damage has been accumulating for some time.

The second major finding concerns recovery. People who remained unemployed continued to show depressed mental health for up to two years after losing their jobs. People who found new work recovered surprisingly quickly. By the third and fourth quarters after a layoff, the mental health of re-employed workers had largely returned to normal.

This conclusion isn’t shocking, but it cuts against many fashionable assumptions about psychological distress. Modern discussions of mental health focus heavily on emotional processing, coping strategies and therapeutic support. Those approaches may help at the margins. But the most powerful remedy for the stress of unemployment is getting back to work. The clinical psychologist Andrew Hartz once explained to me that when he was a caseworker for the homeless in the Bronx, N.Y., what helped his clients most was obtaining employment.

A job provides structure, routine, identity, status, social contact and a sense of forward motion. A person without work loses more than income. He can lose the shape of his day. He can lose a reason to wake up at a certain hour. He can lose the small but important social interactions that make life feel connected to the broader world. Remove work, and the result is a kind of existential drift.

The mental-health damage associated with unemployment appears closely tied to continued joblessness itself. People who quickly return to work largely recover. People who remain detached from the labor force don’t.

The policy implications are obvious. Governments respond to unemployment mainly through financial support. Income matters. But rapid re-employment may matter even more for well-being.

The psychological costs of unemployment are severe, but they’re reversible. The fastest path to recovery is working again.

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A version of this article was originally published in The Wall Street Journal under the title “Smile. You’re Hired.”