How much do spouses suffer from unemployment?

Unemployment spells not only reduce income, they can have lasting consequences. The next job has a lower wage than the preceding one. Unemployed workers lose human capital. They are less healthy, in particular in terms of mental health.

Jan Marcus shows that an unemployment spell also has lasting consequences on others: the spouses. Using data from the apparently inexhaustible German Socio-Economic Panel, he finds that spouses of workers who have bee laid off suffer from worse mental health outcomes. Specifically, he looks at plant closures, where the layoff should not correlate with previous private conditions of the worker or spouse (although I can imagine a plant closure is not a complete surprise and may influence their mental state). While it is understandable that the unemployed worker may suffer, for example, from depression, it is interesting to see that spouses suffer almost as much from adverse mental health. This means not only that the cost of unemployment is higher than we think, but also that spouses should also have access to the mental health benefits the unemployed get.