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Social impacts of the recession

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Published: December 2009

Aim

We were asked by the Cabinet Office to explore how likely it is that people who lose their jobs – or feel job insecurity – go onto experience other social disadvantages (such as depression, financial distress or relationship breakdown). Data from research conducted in the 1991 recession and data from 2008 were used and compared.

Findings

A number of key findings emerged, notably that the incidence of job loss and job insecurity appeared lower than in the previous recession. However, both job loss and job insecurity were associated with an increased risk of depression and financial stress:

  • People who lose their job are around three times more likely to experience common mental health problems than those who remain employed.
  • Two in three (64 per cent) of those who lost their jobs experienced financial difficulties for one or more years, according to longitudinal analysis.
  • One in seven (13%) married or cohabiting people who lost their job (in 1991) experienced a relationship breakdown, compared to one in 12 (8%) who were secure in their job.
  • 9 per cent of people who lost their job (in 1991) experienced eviction over the next five years compared to 3 per cent of people who remained in employment.

It was found that high levels of social support, good mental health, financial savings and qualifications are all important in protecting people against the negative impacts of difficult economic times.

Methodology

We used data from the British Household Panel Survey (BHPS), which can be used to track people over the longer as well as the shorter term as it re-interviews the same people at annual intervals.

Data from 2001 was also looked at, to compare 1991 and 2008 with better economic times.

Read the report