Mental Health and Unemployment in the Youth Age and Labor Market Outcomes

The paper addresses the mutual reaction between unemployment and mental health and its effects on the labor market outcome of young people. Survey data covering 1.918 individuals, collected by the IAB project “Transitions from unemployment – A empirical study on unemployed youth in Germany” over three panel waves between 2000 and 2004 are combined with the “Integrated Labour Market Biographies” (IEB), covering individuals life course from school time up to the labor market activities in 2013, to analyze the employment career of young people under control of mental health and unemployment experience in the youth age in Germany.

The analytical data combine both data gained by retrospective and prospective survey techniques and register data. The data contain daily precise information on unemployment, employment and wages from the register data and a rich set of information on mental health (subjective health, HSCL 10 mental health indicators and HSCL 5 somatic health indicators) work commitment (Warr et al 1979), social background (EGP class scheme and parental education), migration background, household composition etc. from the individuals.

All individuals included in the data experienced a minimum of 92 days of continuous unemployment, however both the total duration of aggregated unemployment duration and the mental health status measured at three points of time is varying over individuals.

That allows addressing both the effects of mental health and unemployment experience and their interaction on individuals’ later labor market outcome up to 15 years after the observed unemployment event.

As depending variables both the social class position and individuals income in 2013 are addressed. In line with the Blau-Duncan Model (1967) and the Boudon Model (1974) the effect of social background will be controlled.

Linear and categorical regression models will be employed to address the scarring effect hypothesis of mental health and unemployment experience.