The advent of the global financial crisis in 2008 and its economic consequences prompted a revival of this stream of literature, which subsequently assesses the relationship between macroeconomic conditions and mental health outcomes. Conceptually, at the individual level, economic crisis can affect mental health through increased unemployment, perceived insecurity, indebtedness, or decreasing welfare support. Many recent studies have documented the prolonged mental health effects of worsening economic conditions. For instance, in Spain, researchers have shown significant associations between crisis periods and increased frequency of primary care mental disorder diagnosis [
7] or self-assessed mental health [
8]. Similarly, results are found in relation to different types of affective disorder admission or diagnosis [
9‐
12] and self-reported mental health in various European and US studies [
13‐
17]. However, some Spanish studies have contradictory results, as they found the economic crisis to be associated with a lower number of people demanding mental health services [
18,
19].
In Italy, the crisis has had profound implications on the population. The systematic rise in unemployment rates and the worsening labour conditions have given rise to substantial inequalities and social tensions [
20]. Also, the generally pessimistic outlook of the economy could have posed additional severe mental health challenges due to the widespread insecurity. Moreover, the governments did not use counter-cycle measures but instead implemented austerity measures, and the health care sector was thereby faced with budget cuts to avoid debt default [
21]. These fiscal policies may have unintentionally exacerbated unequal access to care across socioeconomic groups and geographic areas, and the consequences on mental health care utilisation of the population remain under-explored. If highly disadvantaged population not only have a greater need for mental health care due to the crisis, but these needs are not met due to inadequate resources being allocated to the corresponding services, equity concerns arise. This unmet need may even aggravate the burden on the health care system in the long run.
Although the literature on the association between economic crisis and mental health and health care utilisation is plentiful, the research in the Italian context has investigated the issue either using longitudinal survey data with subjective measurement of mental health [
22] or looking at the correlation between mental disorder and crisis period at the aggregated level [
23]. To our knowledge, no study has, at the Italian national level, proved the causal effect of the economic crisis on mental health care. We aim to contribute to this stream of literature by analysing the potential impact of changing economic conditions on mental disorder admissions throughout the crisis period in Italy. We pay special attention to the differential effect of the crisis on areas characterised by high- and low-income levels. As discussed in the following section, there is a marked paucity of studies that established the causal impact of the crisis on mental health care using administrative data. The results will be informative for policymakers in higher–middle- to high-income countries that had experienced rapid socioeconomic changes accompanied by an increasingly cost-conscious health care system.
To establish the socioeconomic determinants of mental health outcomes, we need to look into multi-disciplinary works for deeper understandings of how adverse conditions act as psychological stressors and how such conditions can have implications on the health care system. While the biological or psychological process is beyond the scope of this paper, we intend to invoke social science theories at the micro-social and macro-social levels to explain this link.
The psychological effects of living around neighbourhoods characterised by low social status are explored in the early literature [
24,
25]. The emphasis is primarily on the social causes of psychological stress, including the amount of control and autonomy over the environment a person resides [
26], the extent to which one feels adequately rewarded for the labour [
27‐
29], or deprivation in its various forms. We recognise the importance of the psycho-social factors, but given our empirical interest, we will only discuss the economic explanation in greater length. Blane [
30] identified the materialist explanation for psychological stress as the “experience arising as a consequence of social structure and organisation, over which the individual has no control”. This illustration is linked to Weber [
31] ’s concept of “life chances”, which depends on one’s bargaining power in the labour market [
32]. The feeling of little control and of being trapped can evoke frustration and anxiety[
33]. This response is likely to happen if individuals from a deprived condition have no means or qualifications to obtain jobs, and the disadvantage is likely to be exacerbated by the neighbourhood where one resides.
At the community level, theories on the sociological process that creates neighbourhood disorders focus on stressors and their implications on residents’ health and wellbeing [
34‐
36]. As discussed above, the lack of control and autonomy can contribute to the variation of health across social gradients [
37]. Residents who experience concentrated deprivation can generate a widespread sense of powerlessness and mistrust, which can further lead to psychological distress—anxiety, anger and depression [
38]. At the macro-societal level, theories on the loss of control during socioeconomic transitions provide insights into the mechanism behind the impact on health. Instability and insecurity in the labour market and unemployment during economic transitions or economic shocks can contribute to the rise in psychological and somatic responses such as chronic stress and anxiety [
39]. Lower levels of perceived agency can diminish optimism for the future and ultimately result in poorer population health [
38]. These broader adverse conditions can activate the chronic arousal of the stress system in its pathway to influence one’s mental health [
40]. In the established theoretical literature, area-level socioeconomic factors are indisputably fundamental causes of mental illness.
Social epidemiologists and psychiatric scientists have long investigated the socioeconomic and environmental determinants of mental illnesses empirically. The early study by Faris and Dunham [
1] examined the geographic distribution of mental disorders across economic gradients. Their systematic analysis pioneered future studies on the association between social disorganisation and mental disorder [
2,
41‐
44]. These studies tested correlations between psychiatric admissions and socioeconomic indicators of the neighbourhood, showing a non-homogenous distribution of admissions to psychiatric care and mental disorders across areas that are differentially deprived.
Interests in this field of research resurfaced with the advent of the great economic crisis, during which rising unemployment and deteriorating working conditions have had implications on the population’s mental health. While most research in the economics literature have analysed physical health outcomes and utilisation [
17,
45‐
48], there is much less understanding on the impact of macroeconomic conditions on mental health and health care. Ruhm [
49] summarised the previous research and broadly concluded that total mortality is pro-cyclical, that death increases during an economic boom, while for the sub-category of suicides or intentional self-harm the relation can be counter-cyclical. Among other related studies, Belloni et al. [
50] have shown that mental health improves upon retirement among 10 European countries, especially for regions that are hit severely by the economic crisis; Drydakis [
16] found more devastating effects of unemployment on mental health during the crisis in Greece; McInerney and Mellor [
51] have found that sudden wealth loss due to the 2008 market crash caused immediate decline in mental health. Most of the research utilised subjective measures of mental health.
Systematic reviews from inter-disciplinary research provided ample evidence on how economic recessions can be associated with mental health outcome and utilisation [
52‐
54]. Frasquilho et al. [
52] found that economic indicators such as rising unemployment and declining income are significantly associated with poor mental wellbeing and increased rates of mental disorders. The majority of the studies investigated countries that are hit the hardest by the economic recession such as Greece [
9,
10], Spain [
7,
8,
55‐
57] and Italy [
22,
58‐
60], though primarily using cross-sectional surveys or ecological analysis, thus providing limited evidence of causal inferences [
52]. Parmar et al. [
53] identified relatively consistent results on the association between deteriorating economic conditions and poor mental health, although risks of bias persist in the studies due to selection and potential confounding effects. A recent systematic review by Silva et al. [
54] further summarised the empirical evidence on the association between periods of economic crisis and the use of mental health care, suggesting that periods of economic crisis can be linked to an increase in hospital admissions for mental disorders. For instance, a cohort study by Modrek et al. [
11] found a marginally significant increase in the post-recession trend in inpatient utilisation compared with pre-recession trend in the US, while Lee et al. [
61], in a time series analysis, found increased hospitalisation rate for affective disorders in Taiwan, especially among the low-income group. We aim to further investigate the causal impact of changing economic conditions on mental health and health care and the social gradient behind in the Italian context, given that the indirect costs in the form of lost mental capital and productivity can pose major challenges for the society.
Another factor related to the economic determinants of mental health is the role of income inequality. The earliest papers on physical health and income inequality showed a cross-sectional association between Gini coefficients of income inequality and various health outcomes [
62,
63]. The literature rapidly expanded in early 2000, and a review by Wilkinson and Pickett [
64] showed an overwhelming majority of the studies found a positive relationship between income inequality and health. As the gulf between the poor and the rich widens in recent decades, many scholars explicitly looked into the effect of inequality on mental health. A 2017 Lancet Psychiatry meta-analysis collected data from 27 eligible studies and showed that there is a systematic negative effect of income inequality on mental health, with effects that vary widely across countries [
65]. Most recently, an in-depth examination illustrated how vast disparities of wealth are associated with elevated levels of stress, anxiety and ultimately, depression and bipolar disorder [
66]. We recognise the substantial contribution from these epidemiological studies and intend to incorporate the dimension of income inequality into our study explicitly.
Institutional background
In Italy, mental health services are offered by the Italian National Health Service (INHS) through a network of community and hospital services. Access is completely free for hospital care, while outpatient specialist services require co-payment. Moreover, broad categories of patients are exempted from such co-payment for economic reasons (low income), age (elderly) or due to specific chronic conditions. With the approval of the Psychiatric Reform in 1978, new admissions to specialised mental institutions were banned (with the exclusion of forensic detention centres), psychiatric hospitals were gradually closed down, and acute hospital care was attributed entirely to general hospitals [
67]. As a general rule, psychiatric services are organised around a department in charge of acute hospital care, outpatient services, day-care activities, including psychological treatments, rehabilitation and social services [
67]. Although the national legislation requires uniform standards across the country, significant inter- and even intra-regional differences persist after almost 40 years of policies towards geographical equity. In particular, southern regions tend to offer fewer services, mainly community based [
68].
The crisis in 2008 hit Italy with some specificities. First, the country’s economic performance was stagnating since the early 1990s. The average real GDP growth in the periods of 1993–2008 and 2009–2018 were merely 0.7% and –0.3%, respectively [
69]. The great crisis hit an economy that was already strained by weak demand, lack of private investment, high public debt and declining international competitiveness in major industrial sectors. Moreover, government policies in Italy are constrained severely by its high public debt, so any attempt to use Keynesian policies to stimulate the economy with higher public spending is limited by tight budget constraints and the Euro Zone rules.
Unemployment rates have been persistently high since the onset of the crisis, especially among younger adults. In 2018, the employment rate for the population aged between 18 and 64 was 58.5%, almost 10% lower than that the average level registered for EU 28 countries [
70]. Given the social structure and the conditions of the labour market, the employment rate is particularly low among the youth—with 43.4%, Italy breaks the EU record for being the country with the lowest employment rate for the age group of 20–29 [
70]. Mean values for the leading indicators of economic performance mask significant geographical variations with some areas of the South being one of the poorest and most disadvantaged among all European countries. Southern regions, comprising about one-third of the Italian population, register a GDP per inhabitant that is less than 50% of Lombardy, the wealthiest region of the north [
70]. Overall, the impact of the crisis primarily exhibits in the form of rising unemployment.