As a professor of social work who studies how people’s finances affect their physical and mental well-being, I’m concerned about the health hazards they’ll face, too.

My research shows that losing your job can seriously harm your physical and mental health, especially when you see the situation as a catastrophe rather than a temporary setback.

Power of financial perception

When people lose their jobs, they do have real problems. Typically, for example, their income and savings decline. They might struggle to keep up on their rent or mortgage payments and might not be able to afford to maintain the same standard of living they had beforehand.

However, research shows that your perspective regarding your financial situation can do more harm to your health than your actual financial circumstances—even as your savings dwindle.

Someone might view losing their job as a temporary setback and remain relatively calm, while another person might experience the same circumstances as a disaster, triggering intense stress that cascades into serious health problems, such as depression and substance abuse. This difference in perspective often determines whether somebody will suffer significant health problems when they lose their job or experience a similar financial setback.

In a study I published in 2023 with social work scholar Theda Rose, we found that how a person felt about a decline in income mattered 20 times more than the actual financial change itself.