NO. 164. INCOME SHOCKS, WORKING HOURS, AND MENTAL HEALTH DURING COVID-19

Athina Raftopoulou, Nicholas Giannakopoulos 2026.

This paper examines mental health patterns in Greece during the COVID-19 pandemic, focusing on labor-market disruptions—primarily income losses and changes in working hours. Using longitudinal EU-SILC data (2019–2024) and first-difference models with individual fixed effects, we estimate the within-person impact of economic shocks on self-reported mental health. Our findings indicate that income losses were significantly associated with an increased likelihood of mental health deterioration, while increases in working hours demonstrated a modest protective association.

These associations exhibited strong heterogeneity across groups. Income shocks were more strongly linked to mental health changes for men, while adjustments in working hours showed a greater link for women. Mid- to late-career workers experienced the most pronounced mental health deterioration in association with income losses, possibly reflecting greater financial and family obligations, whereas younger adults also showed notable associations, consistent with greater economic uncertainty. Occupational characteristics further influenced these patterns: increased hours were a protective factor for private sector workers and employees, while reduced hours were associated with improved mental health among the self-employed, suggesting workload flexibility may alleviate stress.

Despite job-retention policies limiting layoffs, labor market adjustments in Greece primarily involved income reductions and changes in working hours, which were associated with substantial psychological burdens. These findings underscore the importance of income-stabilization measures and integrated labor market mental health support during economic crises.

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