Non-technical summary:
This paper investigates if unemployment rates and consumer sentiment have different effects on male and female suicide rates in Australia. This allows us to observe (i) how an objective economic indicator—the unemployment rate—influences the suicide rate, but also (ii) how a subjective economic indicator—the consumer sentiment index, which broadly reflects individuals’ perceptions and expectations of individual and macroeconomic circumstances—influences the suicide rate. We use monthly data for the period February 1990 to September 2018 on suicide rates, unemployment rates, and the Westpac-Melbourne Institute Consumer Attitudes, Sentiments, and Expectations (CASiE) survey.
Consistent with theoretical expectations, we find that an increase in the unemployment rate is related to an increase in suicide rates, and that an increase in consumer sentiment is related to a decrease in suicide rates. Assuming a June 2020 total population estimate of just over 21 million Australians, each percentage point increase in the unemployment rate is estimated to lead to between 5.2 and 8.4 extra completed suicides. A 10-index point increase in the consumer sentiment index leads to between 2.5 to 8.8 fewer completed suicides.
We find strong evidence that the suicide rate responds differently to increases in unemployment and consumer sentiment than to decreases in unemployment and consumer sentiment; with clear gender differences as well. For men, a higher unemployment rate significantly increases their rate of suicide, but a lower unemployment rate has no effect on male suicide rates. With respect to consumer sentiment, for men increases in sentiment have a stronger effect on suicide rates compared to decreases in sentiment. For women, in contrast, a lower unemployment rate significantly reduces their rate of suicide, but a higher unemployment rate has no impact on female suicide rates. For women, decreases in sentiment have a stronger effect on suicide rates relative to increases in sentiment. We also find that sentiment has a much stronger effect on male suicide rates than on female suicide rates.
Our findings have several important implications for suicide prevention interventions that use the unemployment rate and sentiment indicators as channels of interest. First, a policy targeting both men and women within a unidimensional framework is likely to be less effective than policies targeting men and women separately. This is because male and female suicide rates respond so differently to changes in the unemployment rate and in consumer sentiment. Second, policy interventions using the sentiment channel will likely be more effective by targeting consumers’ expectations of future conditions rather than their current conditions. Finally, the sentiment channel is particularly relevant for men as the effects of the consumer sentiment index and its forward-looking components on the male suicide rate are around twice as large as those on the female suicide rate.
An updated version of this paper has been published as Botha F and Nguyen VH. (2022) Opposite nonlinear effects of unemployment and sentiment on male and female suicide rates: Evidence from Australia. Social Science & Medicine, 292, 114536. DOI: 10.1016/j.socscimed.2021.114536