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J Health Econ. 2013 Dec;32(6):1090-104. doi: 10.1016/j.jhealeco.2013.09.002. Epub 2013 Sep 13.

Recession depression: mental health effects of the 2008 stock market crash.

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The College of William & Mary, Department of Economics, P.O. Box 8795, Williamsburg, VA 23187-8795, USA. Electronic address:


Do sudden, large wealth losses affect mental health? We use exogenous variation in the interview dates of the 2008 Health and Retirement Study to assess the impact of large wealth losses on mental health among older U.S. adults. We compare cross-wave changes in wealth and mental health for respondents interviewed before and after the October 2008 stock market crash. We find that the crash reduced wealth and increased feelings of depression and use of antidepressant drugs, and that these effects were largest among respondents with high levels of stock holdings prior to the crash. These results suggest that sudden wealth losses cause immediate declines in subjective measures of mental health. However, we find no evidence that wealth losses lead to increases in clinically-validated measures of depressive symptoms or indicators of depression.


Depression; Health status; I12; I14; Income; Mental health; Wealth

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