The Psychological Impact of Austerity: A Briefing Paper

Executive Summary
Psychologists are often in a position to see the effects that social and economic changes have on people. We also occupy a relatively powerful position as professionals and therefore have an ethical responsibility to speak out about these effects.

Key conclusions

Austerity policies have damaging psychological costs. Mental health problems are being created in the present, and further problems are being stored for the future. We have identified five ‘Austerity Ailments’. These are specific ways in which austerity policies impact on mental health:

Humiliation and shame
Fear and distrust
Instability and insecurity
Isolation and loneliness
Being trapped and powerless
These experiences have been shown to increase mental health problems. Prolonged humiliation following a severe loss trebles the chance of being diagnosed with clinical depression. Job insecurity is as damaging for mental health as unemployment. Feeling trapped over the long term nearly trebles the chances of being diagnosed with anxiety and depression. Low levels of trust increase the chance of being diagnosed with depression by nearly 50 per cent.

These five ‘ailments’ are indicators of problems in society, of poisonous public policy, weakness of social cohesion and inequalities in power and wealth. We also know what kind of society promotes good health. Key markers are that societies are equal, participatory and cohesive. Some important indicators of a psychologically healthy society are:

Agency
Security
Connection
Meaning
Trust
Mental health is not just an individual issue. To create resilience and promote wellbeing, we need to look at the entirety of the social and economic conditions in which people live.

Recommendations

Social policy should work towards a more equitable and participatory society, to facilitate individual wellbeing, resilient places and strong communities.
It is crucial that policy makers and service developers consider the psychological impacts of current and future policies.
Creating the conditions for wellbeing and resilience directly helps to prevent distress in the short and long term, both saving resources and reducing suffering.