The World Bank Economic Review Advance Access published online on November 4, 2008
The World Bank Economic Review, doi:10.1093/wber/lhn013
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Psychological Health Before, During, and After an Economic Crisis: Results From Indonesia, 1993–2000
Correspondence: Email address is jfriedman{at}worldbank.org
JEL codes: I10, O12
The 1997 Indonesian financial crisis resulted in severe economic dislocation and political upheaval. Previous studies have established the detrimental consequences for economic welfare, physical health, and child education. The crisis also affected the psychological well-being of the Indonesian people. Comparing responses of the same individuals interviewed before and after the crisis, this study documents substantial increases in several dimensions of psychological distress among men and women across the age distribution. It shows larger impacts of the economic crisis on the more vulnerable groups, including those with low education, the rural landless, urban residents, and those in provinces most affected by the crisis. Elevated psychological distress persists even after the economy returns to precrisis levels, suggesting that the deleterious effects of the crisis may persist longer on the psychological well-being of the Indonesian population than on standard measures of economic well-being.
Jed Friedman (corresponding author) is a senior economist in the Development Research Group at the World Bank. Duncan Thomas is a professor of Economics at Duke University and affiliate of the Duke Global Health Institute. His email address is d.thomas{at}duke.edu. This research was supported in part by NICHD grant HD040245. The authors thank three anonymous referees and the journal editor for valuable suggestions on an earlier draft of this work.