Economic Downturns Can Affect Children’s Mental Health

Girl sitting on boardwalk with teddy bearEconomic downturns such as the Great Recession may cause children‘s mental health to deteriorate, according to a new National Bureau of Economic Research study.

Mental health professionals have long known that economic insecurity can negatively affect adult mental health. A 2011 review published in the journal Neuropsychiatry points to increases in suicide, substance abuse, and mental health diagnoses associated with economic disasters. Recent research shows suicide rates rose by 24% between 1999 and 2014, and some studies have established a connection between this increase in suicides—especially among middle-aged Americans—and the Great Recession.

The new study is one of the first to look at the effects of economic downturns on children’s mental health, and the findings suggest children who grow up during a time of economic instability may be at greater risk of developing mental health issues.

The Economy’s Effect on Children’s Mental Health

For the study, researchers used data on children ages 4-17 from the 2001-2013 National Health Interview Survey. The survey also included details on utilization of special education services for mental and behavioral health issues. The team then compared this data to unemployment rates and housing prices during the Great Recession.

The study found some favorable economic measurements, such as lower unemployment rates, can reduce the probability of a child experiencing a mental health issue. Roughly a 1.5% drop in unemployment rates reduces children’s risk of psychological issues by 7.4-10.4% and also reduces the need for special education services by 5.7%. This means the 5% rise in unemployment rates during the Great Recession may have increased children’s need for mental health services by 35-50%.

The researchers note that changing economic climates can affect children even when their parents or families are not directly affected. Economic downturns can increase parental stress and job insecurity, potentially undermining children’s mental health by extension.


  1. Cooper, B. (2011). Economic recession and mental health: An overview. Neuropsychiatry, 25(3).
  2. Golberstein, E., Gonzales, G., & Meara, E. (2016). Economic conditions and children’s mental health. Cambridge, MA: National Bureau of Economic Research. doi: 10.3386/w22459
  3. Soergel, A. (2013, August 1). Great Recession took toll on children’s mental health. Retrieved from

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  • Gabby


    August 10th, 2016 at 11:22 AM

    You would hope that children could be shielded from the harsh realities of life, but sometimes keeping things from them is just impossible.

  • Larry


    August 11th, 2016 at 10:10 AM

    Children know when their parents are unhappy and there are going to be very few parents happy when they have lost a job. Being gainfully employed is something that all good parents will want to be so that they can provide for their families. Without that many times they feel lost as to what they are actually bringing to the table. I think that kids are pretty perceptive and they can sense that.

  • Lacey


    August 13th, 2016 at 7:49 AM

    My suspicion would be that if there is veer any kind of instability in the home then the children are always going to be the ones who suffer the most

  • Marjorie M

    Marjorie M

    August 13th, 2016 at 2:06 PM

    Children are so observant and aware even when do not think that they are paying attention.
    My daughter went through a very troubling time when my husband and I were both unemployed at the same time, and we very much trued to shield her from much of that but when there are worries and fears in the home then your kids are going to recognize that.
    I think that if this ever happened to us again, which I pray that it never will, but if it did, I would try to keep her much better informed and reassure her a little more than I probably did at that time when I was so scared and worried myself.

  • thad


    August 16th, 2016 at 10:27 AM

    Children never need to feel like they are caught in the middle of these precarious economic discussions or financial situations and yet inevitably they always seem to get dragged into it somehow.

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