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BACKGROUND: Previous research has shown that unemployment experiences increase the risk of poor mental health and that this effect differs depending on individual characteristics. Relatively little is known, however, about how the unemployment rate and labour market conditions impact the relationship. This study investigates how municipal unemployment rates and vacancy rates affect mental health in a nationally representative longitudinal survey of initially unemployed Swedish respondents. METHODS: The study uses a nationally representative longitudinal survey of currently and recently unemployed people in Sweden, in which respondents were re-interviewed one year after the initial interview. Mental health was measured using the GHQ-12. The present article uses multilevel models (hierarchical linear models) to combine municipal-level information on unemployment levels and vacancy rates with individual-level control variables. RESULTS: Higher municipal vacancy rates improved mental health among the unemployed. However, no coherent effect of municipal unemployment rate on the relationship between unemployment and mental health was found. CONCLUSIONS: The effect of municipal vacancy rates can be understood in terms of the impact of perceived opportunity on the sense of life-course predictability. That there was no effect of municipal unemployment rate indicates that high local unemployment levels do not reduce the sense of shame and perceived stigma among the unemployed. Taken together, our findings would seem to present a rather bleak picture of the current dramatic labour market situation. The unemployed will be negatively affected by the extremely low demand for labour, while they will not be able to take comfort from their growing numbers.
Strandh et al. (Wed,) studied this question.