The psychological impact of unemployment: A structural analysis of cross‐sectional data

This study used the LISREL methodology to explore important psychological processes in unemployment. The analysis is based on Hepworth's (1980) correlation data from 77 unemployed men. Results indicate that the extent to which a man perceives his time as being occupied or unoccupied affects his subjective well‐being and mental health. There may be a critical period for adaptation to unemployment, occurring soon after job loss. With the passage of time, a reciprocal process seems to take place, where mental health affects subjective well‐being and the proportion of time occupied/unoccupied. These two reciprocal processes could be indicative of a vicious circle of unemployment, resulting in increased negative effects with time.