Economic crisis and mental health — what to expect and how to prepare? (Part 1)

Aco Momcilovic
6 min readSep 15, 2020

Interview with: Tomislav Bunjevac, Psychologist, Institute for Organizational and Personal Development
Interviewer: Aco Momcilovic, Psychologist, EMBA, Owner of FutureHR

Q1. What are the historical examples and studies related to mental health changes resulting from the economic crisis? Do we have any research done in Croatia?

It is not easy to assess the impact of the economic crisis on mental health. To quote one of the researchers who addressed this issue on the occasion of the last significant financial crisis, which began in 2008: “During a financial crisis, the state of the economy can be tracked in seconds, and public health data is usually outdated a few years” (Martin McKee, 2014, Health Cuts Have Consequences, Perth;

The economic crisis to which this statement relates has been vastly simpler to the one we are facing today.

Maybe we need to repeat what it is about first. The model for the emergence of the current crisis, which has not yet occurred in the history of civilization, is straightforward and probably understandable to everyone. It started with a massive health crisis in the form of an epidemic that turned into a pandemic. At the same time, we have the fact that the global health system and medicine, as a rule, do not have sufficient knowledge about the disease itself (first of all, this concerns the lack of a vaccine and effective therapy). Subsequently, the general lock-down brought an economic and financial crisis that massively threatens the naked existence and survival. That led to a general sense of a complex threat to health and existence.

In this context, the aspects mentioned above of the crisis have negative consequences for the overall quality of life, particularly in the mental health area. Traditionally, mental health is defined by so-called mental health ‘negative’ definitions that describe a ‘threat’ to health. In particular, disorders in cognitive functioning and/or mental illnesses are predominantly clearly defined, and it is sporadic to determine what mental health is.

This anomaly exists because the disciplines traditionally associated with mental health (psychiatry as part of medicine and psychology as an independent discipline) were becoming more critical and developed most during and after a significant mass crisis. Considerable development of these disciplines is evident during the First and Second World Wars, between which there was also a tremendous economic crisis. Accordingly, the interest of those disciplines was mainly focused on ‘problems’ and ‘damage’ caused by the situation, so most research is related to mental disorders and diseases, as well as to psychosocial consequences.

People’s health depends on many factors, and it is doubtful to attribute serious health consequences only to factors related to the economic crisis. For example, during the financial crisis, there is no overall increase in mortality. On the contrary, Baumbach and associates noted the downward trend in mortality in eight European countries after the 2008 crisis (Baumbach A, Gulis G. Impact of the financial crisis on selected health outcomes in Europe. Eur J Public Health. 2014;24(3):399–403).

Also, experience shows that during a severe and massive crisis, the suicide rate falls, but after the crisis, this indicator returns to the pre-crisis state, or it even increases.

There are no general systematic studies in Croatia aimed at studying the relationship between economic crisis and mental health, although there are some studies on partial aspects of that relationship. Most often, it is about the relationship between socio-economic and material status and quality of life. These studies attempt to gain insight into the relationship between unemployment and quality of life and mental health aspects.

Q2. What are the most vulnerable groups of people whom we should pay particular attention?

As always, when it comes to times of crisis, when the likelihood of experiencing unpleasant, threatening, and traumatic experiences increases, there are groups of people who are more at risk than others. Those are usually people who, before the crisis, did not develop active and positive ways to deal with the problems, stress, and risks that the crisis brings. Entrepreneurs can be expected to be less risk-averse than others because they are somewhat more prone to taking risks and more active, which increases the likelihood that they perceive a crisis more often as both an opportunity and a challenge.

Q3. Should ‘normal’ people, with no symptoms or history of problems so far, be concerned for themselves?

I don’t think there is a need to ask if ‘normal’ people should be concerned about their mental health. It is essential for most ‘normal’ people that they assess their threat as accurately and realistically as possible, in terms of their existence and maintaining the lifestyle they are used to. Then, to evaluate their capabilities and reserves as accurately as possible, plan their needs and expenses within a reasonable time frame. At the same time, it is vital to avoid the experience of one’s helplessness (so-called ‘learned helplessness’) and adapt the expectations to reduced opportunities during a crisis. As a rule, the smaller the gap between our capabilities (which usually decrease during a crisis) and our expectations (which is reasonable to decrease during a crisis), the less negative consequences for a person can be expected.

On the other hand, there is also a social solidarity mechanism that helps us in crises. This mechanism can significantly reduce adverse effects.

Q4. What are the most common disorders, and how long can they last?

One of the most severe consequences is an increase in the number of suicides. In a study that followed the 2008 financial crisis, 26 European countries saw a rise in suicides by at least 5%. (Stuckler D, Basu S, Suhrcke M, Coutts A, McKee M. Effects of the 2008 recession on health: a first look at European data. Lancet. 2011; 378(9786):124–125).

In the US, during the post-2008 recession, of an estimated 4.750 suicides, 1.330 of them could be attributed to increased unemployment. (Reeves A, Stuckler D, McKee M, Gunnell D, Chang SS, Basu S. Increase in state suicide rates in the USA during the economic recession. Lancet. 2012; 380 (9856): 1813–1814).

An increase in the suicide rate was demonstrated in states with low pre-crisis unemployment, where there was a significant increase in unemployment after the crisis. However, those are only indirect indicators, based on which it is impossible to talk about a clear, direct cause-and-effect relationship.

Some authors have concluded that between 1970 and 2007, in 26 EU countries, every 1% increase in unemployment leads to an increase in the number of suicides by 0.79% under 65.

Besides suicide, the most common consequences are depression (in Greece, the prevalence of depression doubled between 2008 and 2011). Furthermore, those include negative mood swings, increased anxiety, an increased number of psychosomatic problems (pain, neurological problems, gastrointestinal problems, sleep disorders, and sexual functioning disorders), and addiction issues — primarily, increased alcohol consumption. In Spain, it turned out that the prevalence of the above problems in 2010 was significantly higher compared to 2006.

The significant impact of the crisis also considers reducing the use of most medical services (in Greece, during the financial crisis, 15% fewer people sought medical assistance, although they were free, and 14% fewer sought dental services).

Q5. In Croatia, as during the last crisis, small and medium-sized businesses were significantly affected. Many of them had to close the company and stay out of work. What preventive measures can be taken to protect oneself from upcoming stressors best?

Entrepreneurs, in particular, must adapt their expectations to opportunities. Among entrepreneurs, some have their own survival experience during and after the financial crisis (2008), which lasted longer in Croatia than in most other countries. Those who have experienced this already have some psychological defense mechanisms, on the one hand, and some desirable entrepreneurial competencies that can help them survive this crisis.

Also, between 2015 and 2019, for most entrepreneurs, the business was conducted in the context of making a profit (as indicated by statistics from annual reports for Croatia).

The best preventive measures for entrepreneurs are creating reserves during periods when the business is in a positive state, maintaining the readiness and waiting for a crisis, and planning for survival in adverse circumstances (crisis).



Aco Momcilovic

Ph.D. Student. National AI Capital Researcher. Human Resoucres, Psychology, Entrepreneurship, MBA…