The COVID-19 economic crash is idiosyncratic because of its virtual standstill of economic activity. We therefore ask how individual labor market experiences are related to the development of mental health complaints in the spring of 2020. As clinical data collection was compromised during the lockdowns, standardized surveys of the European labor force provide an opportunity to observe mental health complaints as the crisis unfolded. Data are representative of active members of the labor force of six European nations that contained varying levels of COVID-19 burdens in terms of mortality and lockdown measures. We document a steep occupational prestige level gradient on the probability of facing economic hardship during the lockdowns—looming job loss, income loss, and workload decline—which evidently exacerbate socioeconomic inequalities. Analyses indicate a striking positive relationship between instantaneous economic hardships during the COVID-19 lockdown and expressing feelings of depression and health anxiety. Importantly, the magnitude of the association between such hardships and indicators of mental health deterioration is highly dependent on workers’ occupational standing, revealing a second layer of exacerbating inequality.

The COVID-19 pandemic led to a lockdown in European countries in the first half of 2020, including stay-at-home orders and closure of non-essential businesses. To mitigate the detrimental effects on the financial stress of employees and households, the UK government implemented a furlough scheme that temporarily secured earnings up to 80 percent of regular pay. Other employees were at risk of reduced work hours or permanent job loss. Using data from the UK Household Longitudinal Study COVID-19 Supplement, this study examines the extent to which different earnings groups and sociodemographic groups (gender, race/ethnicity, class background) became exposed to economic hardship between March and May of 2020. Results indicate that lower earnings groups were more than twice as likely to experience economic hardship relative to top quintile earners. Furthermore, among pre-COVID employed individuals, men and whites had a lower probability of being furloughed or dismissed from work. Analyses indicate that these are to a large extent attributable to gender earnings inequalities within occupations and the fact that women and racial-ethnic minorities are employed in essential occupations.

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