It is well documented that the COVID-19 pandemic has resulted in large increases in unemployment in many countries. South Africa is no exception: studies estimate that between 2.2 and 2.8 million adults in the country lost their jobs from February to April 2020, following the lockdown and the wide-scale suspension of economic activity. This loss of employment had significant implications for people’s access to economic resources; and it may also be an important reason for why elevated depressive symptoms were reported among adults during the first months of the pandemic .

It is increasingly being recognized that the health costs of COVID-19 are not limited to physical health but include the effects of the pandemic on the individual’s mental or psychological well-being. The study explores how job loss affects people’s mental health using longitudinal micro-data collected after the introduction of the COVID-19 lockdown in South Africa.

The COVID-19 pandemic offers a unique opportunity to analyze the implications of job loss for mental health, because the source of unemployment is very likely to have been exogenous to (or beyond the control of) the individual. There is a large literature which investigates how the loss of employment affects depression or anxiety, where studies compare the mental health of the employed and the unemployed. However, testing the relationship between unemployment and depression typically is complicated by methodological problems associated with causality, which arise even with longitudinal data. This is because it is often not possible to establish the temporal ordering of events: are changes in depressive symptoms caused by, or do they precede, changes in activity status? For example, people who experience job loss may exhibit more depressive symptoms because of their unemployment; but it is also possible that those who are depressed are significantly less likely to search for, or maintain, employment.

The economic fallout of the COVID-19 pandemic resulted in unprecedented job losses, which impaired mental wellbeing significantly. Health policy responses to the crisis therefore need to focus on both physical and mental health interventions.

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