Different Exit Routes from Unemployment and their Impact on Mental Well-Being: The Role of the Economic Situation and the Predictability of the Life Course

Abstract

The relationship between unemployment and mental well-being has been thoroughly researched. Longitudinal studies have shown unemployment to have negative impact on mental well-being, whereas re-employment has positive impact. This research has however taken little interest in a more complex concept of labour market status than just`employment versus unemployment', or indeed other alternative exit routes from unemployment. In this article, an investigation is made into the impact of different exit routes from unemployment on mental well-being. This is done using a longitudinal and nationally representative survey of 3,500 unemployed Swedes. The results indicate that the mental well-being outcome of exiting unemployment is related to how the new status resolves economic difficulties and the uncertainty faced in the unemployment situation. The increase in mental well-being when re-entering paid labour is differentiated depending on the contractual situation. Exit to permanent employment means a larger increase in mental well-being than exit to temporary employment or self-employment. Exit to university education increases mental well-being, whereas exit to high-school equivalent studies does not. Exit from unemployment to maternity/paternity leave increases mental well-being, exit to sick leave reduces mental well-being, while exit to early retirement pension does not significantly change the mental well-being.