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Summary

The unemployed are generally significantly and substantially less satisfied with their lives than the employed. This relationship tends to be stronger in high-income countries where there are sharper differences between employment and unemployment. In studies that look at within-person changes over time, unemployment typically reduces wellbeing by at least 0.6 points (out of 10).

Studying plant closures allows researchers to distinguish between endogenous and exogenous effects of unemployment. Workers who lose their jobs due to reasons outside of their control are generally more dissatisfied, although the effect of job loss remains negative and statistically significant for both groups.

The negative wellbeing impacts of unemployment can also spillover onto the general population – and this cause more total loss of wellbeing than the direct effect on the unemployed. Longer periods of unemployment can have scarring effects with long-lasting negative implications for wellbeing even after those affected have returned to work.

The psychosocial effects of unemployment on wellbeing are greater than the effect of lost income. Policy approaches targeting unemployment are therefore likely to be most conducive to wellbeing if they are able to protect and provide for the psychological and social benefits of work, as opposed to simply providing income support.

Background

Mental illness has a significant impact not only on patients, but also on their carers’ capacity to work.

Aims

To estimate the costs associated with lost labour force participation due to the provision of informal care for people with mental illness in Australia, such as income loss for carers and lost tax revenue and increased welfare payments for government, from 2015 to 2030.

Method

The output data of a microsimulation model Care&WorkMOD were analysed to project the financial costs of informal care for people with mental illness, from 2015 to 2030. Care&WorkMOD is a population-representative microsimulation model of the Australian population aged between 15 and 64 years, built using the Australian Bureau of Statistics Surveys of Disability, Ageing and Carers data and the data from other population-representative microsimulation models.

Results

The total annual national loss of income for all carers due to caring for someone with mental illness was projected to rise from AU$451 million (£219.6 million) in 2015 to AU$645 million (£314 million) in 2030 in real terms. For the government, the total annual lost tax revenue was projected to rise from AU$121 million (£58.9 million) in 2015 to AU$170 million (£82.8 million) in 2030 and welfare payments to increase from AU$170 million (£82.8 million) to AU$220 million (£107 million) in 2030.

Conclusions

The costs associated with lost labour force participation due to the provision of informal care for people with mental illness are projected to increase for both carers and government, with a widening income gap between informal carers and employed non-carers, putting carers at risk of increased inequality.

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11 - Unemployment

Summary

Individual and national financial impacts of informal caring for people with mental illness in Australia, projected to 2030

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2 results

11 - Unemployment

Summary

Individual and national financial impacts of informal caring for people with mental illness in Australia, projected to 2030