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Protecting mental health during periods of financial stress: Evidence from the Australian Coronavirus Supplement income support payment

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  • Botha, Ferdi
  • Butterworth, Peter
  • Wilkins, Roger

Abstract

This paper investigates whether the Australian government's Coronavirus Supplement, a temporary income support payment for unemployed jobseekers during the height of the COVID-19 pandemic, protected mental health (frequency of feeling anxious or depressed during the past week) by lowering financial stress (how comfortable people are in paying for essential services). We use unique nationally representative repeated cross-sectional data on 3843 unemployed Australian adults over the period April 6, 2020 to May 10, 2021. We find that the Coronavirus Supplement payment significantly reduced reported financial stress, and lower financial stress was associated with lower mental distress. Though the Coronavirus Supplement was designed to reduce financial stress, we find the Supplement was also successful in protecting community mental health indirectly via its ability to reduce financial stress. The findings provide support for income support packages to protect mental health during economic shocks. However, transitory support measures also tend have short-lived positive effects on mental health, suggesting that more permanent income support reform may have longer-term mental health benefits.

Suggested Citation

  • Botha, Ferdi & Butterworth, Peter & Wilkins, Roger, 2022. "Protecting mental health during periods of financial stress: Evidence from the Australian Coronavirus Supplement income support payment," Social Science & Medicine, Elsevier, vol. 306(C).
    • Handle: RePEc:eee:socmed:v:306:y:2022:i:c:s0277953622004646
    DOI: 10.1016/j.socscimed.2022.115158
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    1. Benjamin W Nelson & Adam Pettitt & Jessica E Flannery & Nicholas B Allen, 2020. "Rapid assessment of psychological and epidemiological correlates of COVID-19 concern, financial strain, and health-related behavior change in a large online sample," PLOS ONE, Public Library of Science, vol. 15(11), pages 1-16, November.
    2. Butterworth, Peter & Rodgers, Bryan & Windsor, Tim D., 2009. "Financial hardship, socio-economic position and depression: Results from the PATH Through Life Survey," Social Science & Medicine, Elsevier, vol. 69(2), pages 229-237, July.
    3. Simpson, Julija & Albani, Viviana & Bell, Zoe & Bambra, Clare & Brown, Heather, 2021. "Effects of social security policy reforms on mental health and inequalities: A systematic review of observational studies in high-income countries," Social Science & Medicine, Elsevier, vol. 272(C).
    4. Bubonya, Melisa & Cobb-Clark, Deborah A. & Ribar, David C., 2019. "The reciprocal relationship between depressive symptoms and employment status," Economics & Human Biology, Elsevier, vol. 35(C), pages 96-106.
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    Cited by:

    1. Mari, Gabriele, 2024. "Pandemic Income Support Programs and Adolescent Mental Health in the UK, Ireland and Australia," SocArXiv pzr4k, Center for Open Science.
    2. Jeong, Soyun & Fox, Ashley M., 2023. "Enhanced unemployment benefits, mental health, and substance use among low-income households during the COVID-19 pandemic," Social Science & Medicine, Elsevier, vol. 328(C).

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    More about this item

    Keywords

    Mental health; Financial stress; Coronavirus; Income support; Australia;
    All these keywords.

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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