The Impact Of Economic Insecurity On Mental Health

SAFMH News Room

There is unequivocal evidence of the negative impact that unemployment and poverty has on mental health, including increased depressive symptoms and risk of suicide. Additionally, recent data suggests even for those who are employed, if the job is precarious or unstable, this can pose a comparable threat to a person’s physical and mental health.

With the economic fallout and related mental health challenges that came with COVID-19, creating awareness and interventions to reduce economic insecurity is a public mental health priority.

What is economic insecurity and how does it impact on mental wellbeing?

Economic insecurity describes the risk of economic loss faced by people when encountering unpredictable life events. More specifically, this refers to the anxiety felt by people when they are threatened by the potential of severe economic losses and the anticipation of the challenges to recover from these losses. Examples of economic loss could include fear of unemployment, precarious work, or expectation of a worsening financial situation.

Research indicates that while unemployment may increase risks for mortality, economic insecurity had a stronger associated with somatic symptoms (like shortness of breath, fatigue, hypertension, and weakness). These symptoms have been shown to adversely impact on a person’s mental wellbeing and can lead to mental disorders (e.g. anxiety and depression).

Additionally, the extent to which economic insecurity impacts a person’s mental health seems to vary based on different factors. One study in the UK found that economic insecurity impacted on working males’ mental health more than females and that the more precarious the job situation was, the more it impeded on a person’s mental health. These results imply that the anticipation of a potential job loss is similarly associated with worse health than the actual experience of unemployment, and this varies across gender and level of precariousness.

Given the aftermath of COVID-19, the increasing number of employees experiencing job insecurity across the world warrants particular attention. This was recently confirmed by this study investigating if job insecurity due to COVID-19 was associated with worse mental health during the pandemic. After accounting for the participants’ demographic characteristics, health status, other COVID-19 experiences, and anxiety symptoms, researchers found job insecurity due to COVID-19 was related to greater depressive symptoms. Furthermore, economic insecurity was indirectly related to greater anxiety symptoms due to it placing greater financial concerns on the individual.

What are the implications of this research?

  1. While unemployment and poverty must be addressed to improve mental wellness, economic insecurity also requires attention, especially for people more at risk of it impacting their mental health (e.g. males, people in more precarious job).
  2. National financial interventions and policies (like a Basic Income Grant or the COVID-relief grant) could play an important role in tackling the cumulative health consequences of job loss and insecure employment.
  3. While labour market policies focusing on increasing flexible employment relations may result in short-term economic benefits, data suggest that insecure employment and job loss may entail increasing long-term consequences for individual and public health, economic productivity and the costs of the health care system.
    1. In South Africa, an analysis using the National Income Dynamics-Coronavirus Rapid Mobile Survey data revealed no mental health benefits to being furloughed (on unpaid leave), but paid leave had a strong and significant positive effect on the mental health of adults.
    2. Employers should aim to reduce job insecurity and financial concern among employees during the COVID-19 pandemic to address the associated mental health consequences.
    3. Employers should recognise the mental health risks related to job insecurity and implement effective support measures for staff to assist them with these types of issues. An example of this could be Employment Assistant Programme where employees can access mental health support and services. SAFMH offers online and in-person trainings to help organisations adapt and promote good mental wellbeing for their employees. For more information, reach out to us at

Why is this research relevant to people in South Africa?  

In South Africa, economic insecurity and poor mental health care is rife.

  • In the first month following the lockdown, 30% of all working adults had lost their jobs, while a further 12% were furloughed (unpaid leave) and 17% were on paid leave.
  • Almost half (46%) of South Africans say that they or someone in their family went without a cash income “several times,” “many times,” or “always” in 2020/2021. About a third of citizens report having repeatedly gone without enough clean water (34%), enough cooking fuel (33%), or enough food (32%).
  • We know unemployment, poverty and insecure income negative impacts on mental wellbeing. However, despite the high rates of poverty and unemployment, less than 1 in 10 people in South Africa get the mental health care they need.
  • The longer someone does not access mental health care, the more challenging it is for them to get gained employment, perpetuating a cycle of poverty.

While COVID-19 has thrust mental health into the spotlight and has allowed for more open discussions around the need for good mental wellbeing in all people, it is also important that we recognise and address related factors that have also become more prevalent– such as unemployment and economic insecurity – due to the pandemic. While economic hardship was a reality for millions of South Africans even before the pandemic, it is crucial that we acknowledge the increased impact of the pandemic on people’s financial capabilities and resources, and that we advocate vociferously for increased support for those facing financial insecurity, specifically also taking into consideration the mental health support they will invariably also require.


Image courtesy of Timur Weber via Pexels

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