The effects of low-pay and unemployment on psychological well-being: a logistic regression approach

Publication type

Journal Article


Publication date

June 1, 1998


The paper explores the relationship between unemployment and mental distress. The analysis draws upon data from the 1992 British Household Panel Study (BHPS). Six different measures of mental distress are used. Controlling for a number of individual characteristics, unemployed individuals are found to suffer significantly higher odds of experiencing a marked rise in anxiety, depression and loss of confidence and a reduction in self-esteem and the level of general happiness even compared with individuals in low-paid employment. This finding highlights the involuntary nature of unemployment. The results also suggest that all six measures of psychological well-being are lower in middle age compared with younger and older age groups. In addition, women appear to be less affected by unemployment than men.

Published in

Journal of Health Economics


Volume: 17 (1):85-104



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