Unemployment and Mental Health: A Psychological Portrait of the Unemployed

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The link between unemployment and mental health has recently come into the spotlight due to the upheaval of labour markets worldwide post-Covid-19.

People suffering from long-term unemployment are often portrayed as lazy and seldom receive sympathetic messages. Add a hefty dose of stigma, and the impact on mental health don’t take long to display.

Today, we will make a psychological portrait of the unemployed and, most importantly, learn if unemployment can take a toll on personality, the locus of control and how it impacts our chances for reemployment.

Unemployment and Mental Health Correlation


John (alias used) could not believe his luck when he landed his first job as a developer at a promising startup. After four years in high education and thousands of hours into the self-learning route, he felt he had found the right place to fulfil his dream of making the world a better place. 

However, startup life does have more glamour from the outside than the inside, and the job quickly turned sour. John had difficulty adjusting during the time leading to the big launch; he had to work extra hours with little help or guidance from executives to build an application from scratch within five months. Stress levels were high, but John dedicated himself to achieve the set deadline, despite loneliness. He’s sleeping and eating patterns took a turn for the worst. After the successful launch, his company hired other developers with more experience under their belt and removed John from the team with no given reason.  

John felt it fueling inner anger. Since then, he has lost all motivation in dedicating himself to new projects—this experience negatively impacts his views on the relationship between work and reward, leading to further despair and anxiety. 


Jeff (alias used) lost his job unexpectedly when his company relocated production to a different country. He has been out of work for two years; however, he used that time to complete a degree and earn several certifications.

For the last year, he has been sending out his resume. At first, he only applied to jobs that would excite him or challenge him to learn further, but as applications went unanswered, Jeff started to doubt his chances of getting another job. This lack of productive feedback from the applications led him to apply to even more jobs, including jobs he was overqualified for, hoping to end the job search. After now many unanswered or rejected applications, Jeff blames the career gap for his struggles. He considers himself a failure leading to a deteriorating relationship with his friends and family members. 


Peter (alias used) got his first job in tech after contributing to an open-source project on one of the famous platforms for learning web front-end. He used to apply for dozens of positions online but had little success in getting responses. The experience he built upon the open-source platform pushed him to connect with people in his town. 

Peter’s town is not a hotbed in the web-development world; hence there were scarce opportunities to mingle with big fish in the industry. But a local coffee shop held weekly project nights attended by professional web developers. He went to every meeting, showed his work and asked questions if he couldn’t understand something. Eventually, someone noticed him and offered him a job. Peter realized that he needed to get noticed by the right people, so he took every chance to show what he could achieve.

John’s, Jeff’s, and Peter’s stories demonstrate different ways of coping with unemployment. Certain psychological traits help an individual rebound and get employed quickly, despite the typical difficulties many job seekers face. And very often, unemployment bids an unbearable price for human well being. Despite so, people won’t often talk about such events, or worse, seek mental health care when needed.

How Job Loss Affects Behavior

People who are fired, made redundant or put into early retirement, to name a few entry points to unemployment, tend to experience anger, anxiety, loneliness, self-blame and loss of confidence. 

As their unemployment continues, the integrity of their hierarchy of needs is disrupted. According to Maslow, our needs have a hierarchical structure with food and clothing at the bottom and self-actualization at the top. 

After an involuntary job loss, we lose the opportunity to actualize our personal growth. Self-actualization is how we use our abilities to realize our potential. Being deprived of self-actualization intensifies individual anxiety. 

Since professional goals are not met, significant needs such as establishing authority, professional growth, and networking lose relevance. Meaningful leisure activities come to the fore.

As someone who has undergone job displacement, I would map out typical psychological reactions into the following stages: first, a person feels shocked, then a undergoes a short phase of optimism, when job prospects are not dim anymore, which is inevitably replaced by melancholy, and in the case of long-drawn unemployment, fatalism sets in. But this hypothesis is based solely on personal empirical observation, so let’s turn to science. 

A study by Christian von Scheve, Frederike Esche and Jürgen Schupp investigated the impact of unemployment on the emotional well-being of citizens. They compared the respondent’s well-being in the final year of employment with their well-being in the first year of unemployment and all available following years. The study showed that unemployment decreases life satisfaction and that the unemployed tend to adapt to previous levels after approximately two years. 

As for other interesting results:

  • Unemployment is characterized by prolonged sadness. 
  • Except for sadness, unemployment only seems to affect emotional well-being in the short run. Individuals return to pre-unemployment frequencies of anxiety and happiness episodes after just one year in unemployment. 
  • Adaptation of anxiety and happiness to pre-unemployment levels occurs much more rapidly than an adaptation of life satisfaction. 
  • Anger increases only within the first three months of job loss and then again after several years of unemployment. 

Perhaps, our response to unemployment changes over time. The results indicate that people feel angry more often within the first six months of unemployment and anxious more frequently within the first three months after job loss. These curious findings support our theory on how emotional state alters depending on the unemployment phase. 

Other researchers argue that in the initial stages of joblessness, after experiencing shock, people may feel optimistic for a short time.

“During this early optimistic stage, individuals regard themselves as temporarily out of work, they believe they will find another job soon. At this stage, the unemployed actually may feel more in control, since they are relieved of the regimen and duties associated with work” 

Goldsmith, 1996, 338

However, as their attempts to secure employment keep on failing, their motivation starts to decline.

Influence of Unemployment on Personality

According to Christopher J. Boyce, PhD, of the University of Stirling in the United Kingdom, unemployment may have distinct personality implications for men and women. Boyce researched the impact of unemployment on adults who completed a personality test at several points in time.

They recorded participants’ employment status every year for five years. During that time, people had either remained in employment for five years, been unemployed for 1 to 4 years, or experienced unemployment but rejoined the workforce. The researchers looked at five broad personality traits — conscientiousness, neuroticism, agreeableness, extraversion and openness. 

They found that men experienced increased agreeableness during the first two years of unemployment compared to men who never lost their jobs. After two years, the agreeableness levels of the unemployed men began to decline and, in the long run, were lower than those of the men with jobs. 

For women, agreeableness declined with each year of unemployment. Also, it’s interesting to learn that the longer men spent unemployed, the more significant their reduction in conscientiousness. After four years of unemployment, men’s conscientiousness dropped. For women, the impact of unemployment is nonlinear, with increases in the early and late stages of unemployment but reductions in the medium term. 

The results showed that unemployment has broader psychological implications than previously assumed. 

How Locus of Control Affects Reemployment

How do you usually cope with stressful life events? Do you attribute the responsibility for your success or failure to external forces or your actions?

Locus of control is the level to which people believe they have control over their life events. If you have an external locus of control, you tend to think that circumstances and external events define your outcomes. Conversely, internal locus of control is related to beliefs that you control what happens in your life.

Locus focus is often called extreme accountability or extreme focus; plenty of ink has been split addressing the life-changing effects that given way to approach life can have in people.

In general, people with solid accountability believe that investments in the job search have a higher payoff in terms of reemployment probabilities. If a person has a high locus of control, they expect more returns from more significant job search efforts.

Such people remain optimistic and use different search methods. They also consider professional reorientation and learning opportunities. They are entirely independent and retain the ability to cope with the situation and find a suitable role quickly. In general, those are well-versed in more than one career, have diverse work experience, and are highly competitive in the labour market. 

This group easily comes into contact with HR reps trying to tap into the “hidden” job market — because 70% of vacancies are not listed. At the same time, externalizers have a high degree of rationality which allow them to maintain a practical approach and tame their emotions during a job search. These people work a lot to sustain and expand their professional network, just like Peter, who landed his first job in tech after rigorous networking. 

An individual’s readiness to act and their understanding of their responsibility for reemployment is essential to their chance to return to the job market. Such a subjective factor as the locus of control is as important as social and personal resources, including education, social status, experience, family support or hobby. 

Article by Lydia Zhigmitova


Boyce, C. J., Wood, A. M., Daly, M., & Sedikides, C. (2015). Personality change following unemployment. Journal of Applied Psychology, 100(4), 991–1011

Caliendo, M., Cobb-Clark, D.A., Uhlendorff, A. (2015). Locus of Control and Job Search Strategies. Review of Economics and Statistics, 97(1), 88-103

Goldsmith, Arthur H.; Veum, Jonathan R.; & Darity, William A., Jr. (1996). The Psychological Impact of Unemployment and Joblessness. Journal of Socio-Economics, 25(3), 333-358.

Scheve, C., Esche, F., & Schupp, J. (2017). The emotional timeline of unemployment: Anticipation, reaction, and adaptation. Journal of Happiness Studies: An Interdisciplinary Forum on Subjective Well-Being, 18(4), 1231–1254.

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