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We report results from a large-scale survey of the effects of unemployment on emotional functioning. The study design explicitly considers the possibility that prior emotional functioning may influence the risk of unemployment and chances for reemployment. We document substantial effects of unemployment on distress as well as positive emotional effects of reemployment. Contrary to initial expectations, the probability of reemployment is unrelated to baseline emotional functioning. The elimination of elevated distress after reemployment suggests that the worst psychological effects of job loss can be minimized if opportunities exist for reemployment.
Kessler et al. (1989) studied this question.