Does Economic Insecurity Cause Mental Illness?

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Table of Contents

Article Summary
Study Rationale
Literature Review
Study Design & Data
Instrumentation
Findings and Conclusion
Works Cited

The study “Does Economic Insecurity Cause Mental Illness: Evidence from Australian Panel Data” seeks to investigate the impact of economic insecurity on various mental health variables using panel data regressions (Rohde et al 1). The research problem being addressed is whether exposure to various factors of economic risk does indeed result in a quantifiable deterioration or worsening of an individual’s psychological health. It is evident from the abstract of the article that this is no simple issue judging from the fact that exposure to individual level economic risks has been found to have consistently detrimental effects on mental health. This paper critiques the research study using the following framework: article summary; study rationale; literature review; study design and data; instrumentation; and findings and conclusion.

Article Summary

The study investigates the impact of economic insecurity on various mental health variables, and offers an operational definition of economic insecurity as “the sense of anxiety felt by individuals when exposed to uninsured hazards such as job loss, wealth depreciation or unexpected expenses” (Rohde et al 1). To address the issue, the researchers develop eight alternative measures of economic insecurity and investigate the relationships with two measures of mental health, uses Australian panel data that is rich in items on financial expectations and measures of individual psychological wellbeing, as well as employs regression models to evaluate the causal effects of economic insecurity on mental health (Rohde et al 2).

The study’s main objectives are two-fold: (1) to establish if the macroeconomic benefits associated with a policy formulation that promotes labor market flexibility over job security and the welfare state have negative health consequences, and (2) to develop a methodological framework or model which can be effectively used to capture economic insecurity variables in a way that they are supposed to be interpreted (Rohde et al 2).

Study Rationale

The authors postulate that “concern for economic insecurity comes from the belief that it increases stress levels and therefore lowers health and wellbeing” (Rohde et al 2). Indeed, the authors cite vast epidemiological literature that seems to associate excess stress with the morbidity of psychological and psychiatric diseases such as anxiety disorders, depression, and bipolar disorder to give credence to their assertion that economic insecurity may be responsible for a whole range of mental conditions being witnessed in contemporary times.

However, as suggested by the authors, there appears to be little information on whether exposure to economic risk does indeed cause a quantifiable worsening of an individual’s psychological health and hence the need to fill this gap in the literature. But this justification is somehow inaccurate judging from the fact that research studies dating back to 1990s had already established a positive relationship between economic insecurity variables such as poverty and common mental disorders (Patel & Kleinman 609).

Literature Review

The study fails to provide an elaborate review of the relevant literature relating to economic insecurity and mental health, instead preferring to offer a succinct elucidation of some epidemiological studies that have found a positive correlation between stress and adverse mental and psychological health outcomes. This weakness perhaps explains why the authors fail to provide an accurate justification for the study, as stress is not synonymous to economic insecurity and it cannot be considered as the singular foremost outcome of economic insecurity (Kondilis et al 974). A more elaborate literature review could have provided the researchers with deep insights on all the underlying issues under investigation.

Study Design & Data

The study uses a quantitative research design to investigate the impact of economic insecurity on mental health by conducting an analysis of high quality panel data from the Household Income and Labor Dynamics in Australia (HILDA). It is indicated that the HILDA “survey has followed almost 20,000 individuals over 11 years…and asks an extensive range of questions on health, incomes, demographics, life events and labor market characteristics” (Rohde et al 3). Although the study uses various indicators to demonstrate existence of economic health and its relationship to mental health (e.g., objective indicators, subjective indicators, income stream indicators, hazard probability indicators), it is yet unclear how the researchers interpret the ordinal variables contained in these indicators using a linear scale (Rohde et al 5).

Furthermore, although the study’s main objective and design are congruent by virtue of the fact that a quantitative research design is effective in investigating how an independent variable (economic insecurity) affects a dependent variable (mental illness), it is yet not clear to a general reader how the various variables have been inverted to ensure consistency with the concept of insecurity and mental health.

Instrumentation

The authors perform well in explaining the two main measures available in the HILDA data set and how issues of validity, reliability and acceptability have been addressed. The measures include (1) the SF-36 survey which contains 36 items relating to eight different facets of physical and mental health where the responses are aggregated to give each participant a score from 0 to 100 with higher scores indicating superior health outcomes, and (2) the Kessler Psychological Distress (K10) score which is derived from 10 questions on respondent lethargy, depression, restlessness, sadness and anxiety in the four weeks immediately preceding the survey.

Other variables used in the study to measure economic insecurity include employment status, income levels, financial satisfaction, feelings of job security, perceived capability of householders to raise emergency funds, perceived capability of householders to meet standard expenses such as rental repayments or utility bills, education, age, household size, marital status, and indicator of geographic remoteness (Rohde et al 3). Overall, it can be argued that the instrumentation of this study is easy to understand as it employs standardized instruments (the SF-36 survey and the Kessler Psychological Distress); however, the researchers fail to report on the psychometrics of these measures such as Cronbach’s alpha.

Findings and Conclusion

A multiplicity of regression models has been used by the researchers to analyze the data and interpret the findings. However, a major weakness is that the researchers do not employ any descriptive statistics that could have made it possible for general readers to understand the basics of the study findings. Indeed, the inferential statistics used are too complex for general readers to make any headway on the interrelationships between various variables.

Overall, the researchers conclude that (1) negative health effects can be linked to exogenous shifts in financial satisfaction, feelings of job security, capability to produce emergency funds risk of downward income mobility and probability of failing to fulfill standard household expenses in the future, (2) psychological effects arising from economic insecurity are real and therefore should be considered in the formulation of economic policy, and (3) there are mental health consequences for a broad range of real or perceived economic risks. However, although the researchers use newer and more complex regression models to analyze data and interpret the findings, it is hard to buy into their assertion that theirs is one of the seminal studies to ever come up with such findings.

Works Cited

Kondilis, Elias, Stathis Giannakopoulos, Magda Gavana, Ioanna Lerodiakonou, Howard Waitzkin and Alexis Benos. “Economic Crisis, Restrictive Policies, and the Population’s Health and Health Care: The Greek Case.” American Journal of Public Health. 103.6 (2013): 973-979. Academic Search Premier. Web.

Patel, Vikram and Arthur Kleinman. “Poverty and common Mental Disorders in Developing Countries.” Bulletin of the World Health Organization. 81.8 (2003): 609-615. Academic Search Premier. Web.

Rohde, Nicholas, Kam Ki Tang, Lars Osberg and D.S. Prasada Rao 2013. Does Economic Insecurity Cause Mental Illness? Evidence from Australian Panel Data. 2015. Web.

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