This paper evaluates the effects of economic shocks to current and expected income reduction on mental wellbeing. We use individual-level data from three East Asian countries; China, Japan, and South Korea, during the early phases of the pandemic when the COVID-induced economic shocks were severe. The findings reveal significant causal effects from current and expected income reduction on different aspects of mental health deterioration, including anxiety, trouble sleeping, boredom, and loneliness. Interestingly, we found that expectations of future income loss have a significantly larger effect on people's mental wellbeing compared to current falls in income. This has significant implications for the design of policies to support income during pandemics.
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| http://dx.doi.org/10.1016/j.ehb.2024.101378 | DOI Listing |
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