Unemployment and suicide in Italy: evidence of a long-run association mitigated by public unemployment spending

Abstract

From the mid-1990s on, the suicide rate in Italy declined steadily, then apparently rose again after the onset of the Great Recession, along with a sharp increase in unemployment. The aim of this study is to test the association between the suicide rate and unemployment (i.e., the unemployment rate for males and females in the period 1977-2015, and the long-term unemployment rate in the period 1983-2012) in Italy, by means of cointegration techniques. The analysis was adjusted for public unemployment spending (referring to the period 1980-2012). The study identified a long-run relationship between the suicide rate and long-term unemployment. On the other hand, an association between suicide and unemployment rate emerged, though statistically weaker. A 1% increase in long-term unemployment increases the suicide rate by 0.83%, with a long-term effect lasting up to 18 years. Public unemployment spending (as percentage of the Italian gross domestic product) may mitigate this association: when its annual growth rate is higher than 0.18%, no impact of unemployment on suicide in detectable. A decrease in the suicide rate is expected for higher amounts of social spending, which may be able to compensate for the reduced level of social integration resulting from unemployment, helping the individual to continue to integrate into society. A corollary of this is that austerity in times of economic recession may exacerbate the impact of the economic downturn on mental health. However, a specific "flexicurity" system (intended as a combination of high employment protection, job satisfaction and labour-market policies) may have a positive impact on health.

Keywords: Austerity measures; Cointegration analysis; ECM; Italy; Suicide mortality.