gms | German Medical Science

Background and Objectives: While job displacements are important feature in each well-functioning market economy, they might have adverse consequences for those being displaced. Besides going along with economic insecuri-ties, loss of valued relationships, status and identity, job losses are believed to affect health as they are one of the more stressful events in life. Although there exists a well documented negative relationship between job losses or unemployment and health, the existence of a causal link is still debated. The aim of this paper is to provide empirical evidence on the effect of job loss on mental health, especially on the amount of consumed antidepressants using unique administrative data.

Data: We use individual claims data from the Techniker Krankenkasse, which is the second largest sickness fund in Germany with more than 8.6 million insured persons. This data source provides us with very detailed information on individual characteristics as well as their health status for the years 2008 and 2009. Among others we observe the yearly prescribed amount of antidepressant measured in daily defined doses.

Methods: Propensity Score matching techniques are used to compare the antidepressant consumption of work-ers who lost their jobs and were unemployed in 2009 with those who remained employed. As the treatment is the job loss (in 2009), all individuals were employed in the pre-treatment period (2008). In addition, we focus on individuals without depressions in the pre-treatment period, thereby addressing the reverse causality problem as job displacements for these workers are unlikely caused by depres-sions.

Results: In this study, our findings suggest that job losses go along with depressions as those individuals who become unemployed have significantly higher prescriptions of antidepressants in the year when they were unemployed compared to those who remained employed. These results are robust to different propensity score techniques.

Conclusion: We find significant effects of unemployment on the prescribed amount of antidepressants. Hence, the results are in line with much of the previous literature that finds negative health consequences of unemployment. We conclude that the underlying data that have not been used in the given context so far constitute a very reliable source of information for the analyzed question as well as various other economic studies.