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Published on: December 2, 2015
Income volatility and psychological depression
Joann Prause1, David Dooley, Jimi Huh
1Department of Psychology and Social Behavior, School of Social Ecology, University of California, Irvine, CA, 92697, USA. japrause@uci.edu
American Journal of Community Psychology
|January 9, 2009
Summary
Increasing income volatility, particularly downward income loss, is linked to higher depression rates in workers. However, overall income fluctuations may offer some protective effects against depression.
Area of Science:
- Socioeconomic factors and mental health
- Labor economics and psychological well-being
- Longitudinal cohort studies in social science
Background:
- Growing income volatility is observed, especially among lower-income individuals.
- This trend may stem from employers shifting economic risks to employees, reducing job security and benefits.
- Understanding the mental health implications of income instability is crucial.
Purpose of the Study:
- To investigate whether absolute income volatility and downward income volatility predict depression.
- To control for pre-existing depression in the analysis.
- To examine the interplay between different types of income volatility and depression.
Main Methods:
- Utilized data from the National Longitudinal Survey of Youth (NLSY79) with 4,493 participants.
- Measured depression using the CES-D scale at age 40.
- Included prior depression data from 8-10 years earlier and various covariates.
Main Results:
- Downward income volatility (frequency of income loss) showed a positive association with depression.
- Absolute income volatility was negatively associated with depression after adjusting for covariates.
- An interaction effect revealed that downward volatility increased depression risk only under conditions of high absolute volatility.
Conclusions:
- Income loss is a significant predictor of depression, particularly when overall income fluctuations are high.
- Absolute income volatility may have a complex, potentially protective, relationship with depression.
- Findings are specific to individuals in their 30s and require replication to explore mediating factors.
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