Skip to main content

Advertisement

SpringerLink
Log in

The Impact of Unemployment on Well-Being: Evidence from the Regional Level Suicide Data in Finland

  • Published:
Social Indicators Research Aims and scope Submit manuscript

Abstract

We explore the effects of unemployment on the well-being of the regional population with disaggregated suicide data across gender and age in Finland during 1991–2011. On the basis of the economic theory of rational suicides we show that rising unemployment expectations have a negative effect on well-being by increasing regional suicide mortality. We find that a possible future job loss has a significant effect on the prime working-age male (35–64 years old) suicides. We also provide strong evidence of the social norms on unemployment in Finland. We find, especially, that working-age males suffer more heavily from unemployment if they live in the area where the regional unemployment is low relative to the national average.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1
Fig. 2

Similar content being viewed by others

Notes

  1. Bertrand and Mullainathan (2001) state that one must be careful in interpreting the self-reported data results, since people tend to overestimate their subjective well-being. Böckerman and Ilmakunnas (2009) could not find any significant negative relationship between unemployment and self-assessed health, when they examined the relationship between unemployment and self-assessed health in Finland over the period 1996–2001.

  2. The World Health Organization (WHO) place Finland in the highest position among the countries of Western Europe (WHO 2013) and in the 13th place in the world.

  3. In 2010, for example, the unemployment rate varied from 6.8 % to over 14 % between regions (National Institute of Health and Welfare 2014).

  4. Marcotte (2003) notes that all the recent empirical works on the economics of suicide follows Hamermesh and Soss basic framework.

  5. Clark (2003) refers situation, where one’s own misfortune is easier to endure if there are more people around in the same miserable situation, as a social norm effect. There is also a growing literature in economics to support the view that individuals’ well-being is highly dependent to how they assess themselves relative to others. For example, the concept of ‘keeping up with Joneses’ states that individual compares his/hers own situation to others.

  6. There are also at least two further reasons to assume that the association between unemployment and suicide might be asymmetric. First, the unemployment rates are asymmetric series as presented, for example, in Skalin and Teräsvirta (2002). This implies that the connection to the suicide mortality is probably asymmetric, too. Second, as economic theory states, unemployment depreciates individual’s human capital (see e.g. Becker 1964). During the unemployment spell it is difficult to find a job, which depreciates human capital and when the economy recovers it is more difficult to find a job. Some evidence with this respect is presented in Koo and Cox (2008), which show that long-term unemployment lowers significantly future income expectations and expected utility. This might lead for some of these individuals’ life-time discounted utility level to decrease below the threshold level that triggers them to commit suicide. The situation is totally different in good economic times, when there is relatively easy to find a job and appreciate one’s human capital. Hence, these effects lead us to suggest that the association between unemployment and suicide might be asymmetric.

  7. Hamilton (1996) and Mocan and Bali (2010) have used the same type of framework in analyzing asymmetries for different types of questions.

  8. All the variables used in estimation of Eq. (3) were de-trended using the Hodrick–Prescott (Hodrick and Prescott 1997) filtering method. The smoothing parameter was set at 6.25 based on the so called Ravn–Uhlig rule (Ravn and Uhlig 2002).

  9. Stevenson and Wolfers (2013) use similar type of specification in their analysis of the relation between income and well-being.

  10. To use the regional data is especially crucial for Finland, since the economic situation varies significantly within a country.

  11. More precisely, the balance figure expresses a qualitative answer to the Consumer Barometer question: “How likely are you to be thrown into unemployment within the next 12 months?” in terms can be interpreted numerically. The balance figure is obtained by deducting the weighted proportion of negative answers from that of positive answers. The balance figure can range between +100 and −100. A positive balance figure denotes an optimistic and a negative balance figure a pessimistic view on the economy (Official Statistics of Finland (OSF) 2014).

  12. We use the square root of the gender-specific population in the region as weights for observations in estimations.

  13. Covariance matrix estimator proposed by Driscoll and Kraay (1998) is used to produce heteroskedasticty-consistent standard errors that are robust to very general forms of spatial and temporal dependence.

  14. We should mention that the results with the present unemployment rates give a similar finding as with the lagged unemployment. The results are not presented here, but they are available upon a request from the authors.

  15. The National Strategy for Suicide Prevention in Finland was introduced in the late 1980s, leading to a national suicide prevention program including a nationwide research phase during 1986–1991, which was followed by a nationwide implementation phase during 1992–1996 (Upanne et al. 1999). Some authors suggest that steadily decreased suicide rates since the late 1990’s have at least to some extent followed from the nationwide suicide prevention strategy (see e.g. Martin and Page 2009).

  16. Previously, many firms used to offer lifetime employment in Finland.

References

  • Akerlof, G. A. (1980). A theory of social custom, of which unemployment may be one consequence. The Quarterly Journal of Economics, 94(4), 749–775.

    Article  Google Scholar 

  • Andrés, A. R. (2005). Income equality, unemployment, and suicide: A panel data analysis of 15 European countries. Applied Economics, 37(4), 439–451.

    Article  Google Scholar 

  • Becker, G. S. (1964). Human capital. New York: Columbia University Press.

    Google Scholar 

  • Bertrand, M., & Mullainathan, S. (2001). Do people mean what they say? Implications for subjective survey data. American Economic Review, 91(2), 67–72.

    Article  Google Scholar 

  • Blanchflower, D., Bell, D. N. F., Montagnoli, A., & Moro, M. (2014). The happiness trade-off between unemployment and inflation. Journal of Money, Credit and Banking, 46(S2), 117–141.

    Article  Google Scholar 

  • Böckerman, P., & Ilmakunnas, P. (2009). Unemployment and self-assessed health: Evidence from panel data. Health Economics, 18(2), 161–179.

    Article  Google Scholar 

  • Breuer, C. (2015). Unemployment and suicide mortality: Evidence from regional panel data in Europe. Health Economics, 24(8), 936–950.

    Article  Google Scholar 

  • Chang, S.-S., Stuckler, D., Yip, P., & Gunnell, D. (2013). Impact of 2008 global economic crisis on suicide: Time trend study in 54 countries. British Medical Journal, 347, 5239.

    Article  Google Scholar 

  • Chen, J., Choi, Y. J., Mori, K., Sawada, Y., & Sugano, S. (2012). Socio-economic studies on suicide: A survey. Journal of Economic Surveys, 26(2), 271–306.

    Article  Google Scholar 

  • Clark, A. E. (2003). Unemployment as a social norm: Psychological evidence from panel data. Journal of Labor Economics, 21(2), 323–351.

    Article  Google Scholar 

  • Clark, A. E., Knabe, A., & Rätzel, S. (2010). Boon or bane? Others’ unemployment, well-being and job insecurity. Labour Economics, 17(1), 52–61.

    Article  Google Scholar 

  • Clark, A. E., & Oswald, A. J. (1994). Unhappiness and unemployment. Economic Journal, 104, 648–659.

    Article  Google Scholar 

  • Daly, M. C., Wilson, D. J., & Johnson, N. J. (2013). Relative status and well-being: evidence from U.S. suicide deaths. The Review of Economics and Statistics, 95(5), 1480–1500.

    Article  Google Scholar 

  • Di Tella, R., MacCulloch, R. J., & Oswald, A. J. (2001). Preferences over inflation and unemployment: Evidence from surveys of happiness. American Economic Review, 91(1), 335–341.

    Article  Google Scholar 

  • Driscoll, J. C., & Kraay, A. C. (1998). Consistent covariance matrix estimation with spatially dependent panel data. Review of Economics and Statistics, 80(4), 549–560.

    Article  Google Scholar 

  • Durkheim, E. (1897). Le Suicide: Étude de Sociologie. Paris: Alcan. (Trans. in Finnish, Randell, S. (1985) Itsemurha: Sosiologinen tutkimus. Helsinki: Tammi).

  • Ferrie, J. E. (1999). Health consequences of job insecurity. In J. E. Ferrie, M. G. Marmot, J. Griffiths, & E. Ziglio (Eds.), Labour market changes and job insecurity: A challenge for social welfare and health promotion (pp. 51–100). Copenhagen: WHO Regional Office for Europe.

    Google Scholar 

  • Ferrie, J. E., Shipley, M. J., Newman, K., Stansfeld, S. A., & Marmot, M. (2005). Self-reported job insecurity and health in the Whitehall II study: Potential explanations of the relationship. Social Science and Medicine, 60(7), 1593–1602.

    Article  Google Scholar 

  • Hamermesh, D. S., & Soss, N. M. (1974). An economic theory of suicide. Journal of Political Economy, 82(1), 83–98.

    Article  Google Scholar 

  • Hamilton, J. D. (1996). This is what happened to the oil-price–macroeconomy relationship. Journal of Monetary Economics, 38(2), 215–220.

    Article  Google Scholar 

  • Helliwell, J. F. (2007). Well-being and social capital: Does suicide pose a puzzle? Social Indicators Research, 81(3), 455–496.

    Article  Google Scholar 

  • Hodrick, R. J., & Prescott, E. P. (1997). Postwar U.S. business cycles: An empirical investigation. Journal of Money, Credit and Banking, 29(1), 1–16.

    Article  Google Scholar 

  • Knabe, A., & Rätzel, S. (2011). Scarring or scaring? The psychological impact on past unemployment and future unemployment risk. Economica, 78(310), 283–293.

    Article  Google Scholar 

  • Koo, J., & Cox, M. W. (2008). An economic interpretation of suicide cycles in Japan. Contemporary Economic Policy, 26(1), 162–174.

    Article  Google Scholar 

  • László, K. D., Pikhart, H., Kopp, M. S., Bobak, M., Pajak, A., Malyutina, S., et al. (2010). Job insecurity and health: A study of 16 European countries. Social Science and Medicine, 70(6), 867–874.

    Article  Google Scholar 

  • Mandal, B., Ayyagari, P., & Gallo, W. T. (2011). Job loss and depression: The role of subjective expectations. Social Science and Medicine, 72(4), 576–583.

    Article  Google Scholar 

  • Marcotte, D. E. (2003). The economics of suicide revisited. Southern Economic Journal, 69(3), 628–643.

    Article  Google Scholar 

  • Martin, G., Page, A. (2009). National suicide prevention strategies: A comparison. The University of Queensland. ISBN 978-0-9808207-9-9. Can be assessed from http://www.suicidepreventionstudies.org/index.html

  • Mocan, H. N., & Bali, T. G. (2010). Asymmetric crime cycles. The Review of Economics and Statistics, 92(4), 899–911.

    Article  Google Scholar 

  • National Institute for Health and Welfare (THL). (2014). SOTKAnet website www.sotkanet.fi [Referred 28.5.2014].

  • Neumayer, E. (2003). Are socioeconomic factors valid determinants of suicide? Controlling for national cultures of suicide with fixed-effects estimation. Cross-cultural research, 37(3), 307–329.

    Article  Google Scholar 

  • Noh, Y.-W. (2009). Does unemployment increase suicide rates? The OECD panel evidence. Journal of Economic Psychology, 30(4), 575–582.

    Article  Google Scholar 

  • Official Statistics of Finland (OSF) (2014). Consumer survey [e-publication]. ISSN = 1799-1382. Helsinki: Statistics Finland. Access method: http://tilastokeskus.fi/til/kbar/kas_en.html. [Referred 21.5.2014].

  • Piérard, E., & Grootendorst, P. (2014). Do downturns cause depreciation? The effect of economic conditions on suicide rates in Canada. Applied Economics, 46(10), 1081–1092.

    Article  Google Scholar 

  • Platt, S., & Hawton, K. (2000). Suicidal behaviour and the labour market. In K. Hawton & K. van Heeringen (Eds.), The international handbook of suicide and attempted suicide (pp. 310–384). New York: Wiley.

    Google Scholar 

  • Ravn, M. O., & Uhlig, H. (2002). On adjusting the Hodrick–Prescott filter for the frequency of observations. Review of Economics and Statistics, 84(2), 371–376.

    Article  Google Scholar 

  • Ruhm, C. J. (2000). Are recessions good for your health? Quarterly Journal of Economics, 115(2), 617–650.

    Article  Google Scholar 

  • Skalin, J., & Teräsvirta, T. (2002). Modeling asymmetries and moving equilibria in unemployment rates. Macroeconomic Dynamics, 6(2), 202–241.

    Article  Google Scholar 

  • Statistics Finland. (2013). Causes of death. http://www.stat.fi/til/ksyyt/tau_en.html. [Referred 18.12.2013].

  • Stevenson, B., Wolfers, J. (2013). Subjective well-being and income: is there any evidence of satiation? NBER Working Paper No. 18992.

  • Stuckler, D., Basu, S., Suhrcke, M., Coutts, A., & McKee, M. (2009). The public health effect of economic crises and alternative policy responses in Europe: An empirical analysis. Lancet, 25(374), 315–323.

    Article  Google Scholar 

  • Upanne, M., Hakanen, J., & Rautava, M. (1999). Can suicide be prevented? The suicide project in Finland 1992–1995: Goals, implementation and evaluation. National Research and Development Centre for Welfare and Health (STAKES): Helsinki.

    Google Scholar 

  • WHO. (2013). Mental Health. Data and statistics. http://www.who.int/mental_health/prevention/suicide_rates/en/index.html. [Referred 12.9.2013].

  • Wu, W.-C., & Cheng, H.-P. (2010). Symmetric mortality and asymmetric suicide cycles. Social Science and Medicine, 70(12), 1974–1981.

    Article  Google Scholar 

Download references

Acknowledgments

We thank Petri Böckerman, Matti Isohanni, Jouko Miettunen, Mikko Puhakka, Rauli Svento, and participants in the research seminar of Department of Economics of the University of Oulu, the thesis seminar of the Psychiatric Clinic of the University of Oulu, the XXXVI Annual Meeting of the Finnish Economic Association, and the 2nd International PhD Meeting of Thessaloniki in Economics for constructive comments.

Author information

Authors and Affiliations

  1. Department of Economics, University of Oulu, Oulu, Finland

    Sanna Huikari & Marko Korhonen

Authors
  1. Sanna Huikari
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Marko Korhonen
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Marko Korhonen.

Ethics declarations

Conflict of interest

The authors declare that they have no conflict of interest.

Appendix

Appendix

See Table 7.

Table 7 Variables used in the study
Full size table

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Huikari, S., Korhonen, M. The Impact of Unemployment on Well-Being: Evidence from the Regional Level Suicide Data in Finland. Soc Indic Res 128, 1103–1119 (2016). https://doi.org/10.1007/s11205-015-1071-x

Download citation

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11205-015-1071-x

Keywords

JEL Classification

Search

Navigation