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Panel data from the Household, Income and Labour Dynamics in Australia Survey are used to examine the impact of involuntary job loss on the mental health of spouses and adolescent children. Estimates from fixed effects models show that the mental health of women (but not men) declines following a spouse's job loss, but only if that job loss results in a sustained period of non-employment or if the couple experienced prior financial hardship or relationship strain. A negative effect of parental job loss on the mental health of adolescent children is also found but is restricted to girls. JEL Classification: I31, J10, J65

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Poor mental health is a risk factor affecting work attendance, but the magnitude of this effect, at least in a country where the rate of sickness absence is relatively low, is modest.

No abstract