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Job loss and unemployment can start a vicious cycle of depression, loss of personal control, decreased emotional function and a decline of physical health. And simply finding a new job might not be the cure.
Price and his colleagues investigated the link between job loss and depression, impaired functioning and poor health in a study of 756 job-seekers. Overall, the financial strain that resulted from the participants' unemployment led to a cascade of negative life events. The researchers found that the chain of adversity - job loss, financial strain, depression, loss of personal control, decreased emotional functioning and declining physical health - continued for more than two years, even after re-employment. 

These findings suggest that increases in depression and loss of personal control with those who lose their jobs can have adverse affects on health and emotional functioning for longer than the initial triggering event - job loss - possibly interfering with finding another job. These events thus resulted in spirals of disadvantage that reduced the life chances of vulnerable individuals still further. 

Financial stress related to job loss

The loss of employment almost always triggers financial stress. When no money is coming in, financial difficulties may hinder someone from the ability to make a car payment. So the car is retrieved, and this is a negative life event. Without transportation, finding new employment may become difficult, which is another negative life event. So the longer people remain unemployed, the more financial difficulties they are likely to experience. And the negative life events pile up, one on top of the other.

In addition, a job loss may also mean the loss of health care benefits. This could make caring for health problems difficult, putting additional stress on finances and relationships.

Job loss: issues beyond financial stress

Uncertainty about the future is a major problem. This feeling of uncertainty is usually compounded by the insecurities related to a new job in the current economy. Depression mostly strikes professional people who thought they had a very predictable career path. Job loss thus puts you at higher risk for depression, anxiety, and problems with drugs and alcohol. Headaches, hypertension and ulcers are the usual signs.

Emotional upsets due to job loss

Losing a job is emotionally upsetting. Anger may surface, because this major life-change often leaves a person feeling totally out of control. Robert C. Chope, professor of counseling and coordinator of the Career Counseling Program at San Francisco State University in California, stated that feelings about job loss go through the stages of shock, denial, hopes that things will work out and depression when hopeful expectations are not realized.

Some signs of depression during unemployment include sleeplessness, changes in appetite, excessive alcohol use and careless attitude for themselves.

Depression continues after re-employment

Even after a person has found a new job, depression may persist. According to Chope, when people find new jobs, they are concerned about losing them. They are scared that they might have to go through the whole process again and the next time, the situation could be worse due to their advancing age and they probably might be missing out on the needed skills. People with these fears react by toeing the company line, not being as creative as in previous jobs and by becoming more self-protective.

Confidence-building during job loss

It is important to remain hopeful during times of job loss and unpredictability. Tips for finding a new job include networking with people, being imaginative and creative; redoing your budget and considering alternatives to one traditional job such as three part-time jobs.

Following steps can be helpful to work through the emotions of job loss:

  • In the current job scenario, prepare yourself for such a situation by planning ahead. This preparation could encompass both financial planning for the future and mental health techniques that encourage you to find your value and self-worth outside the job market.
  • It is important to stop negative self-talk. A huge amount of depressed thoughts can be wiped out just by stopping negative talk. People also need to attend to their appearance and attempt to look better, promote healthier habits, create self-affirmations and believe in their own abilities.
  • It helps to write about how you feel. In a study conducted in 1994, men who had lost their jobs found work significantly faster if they wrote about the experience for 30 minutes a day for five consecutive days. Translating upsetting experiences into language not only diffuses intense emotions, but changes the way you view experiences. It helps you develop perspective on your motives, thoughts, feelings and reactions.
  • Many people succumb to old prejudices about the unemployed when they are laid off. To rebuild self-confidence, it is ideal to make a list of things that you are good at and the ones that you like about yourself. Describe successful assignments or projects. You can ask co-workers and managers for letters of appreciation and recommendation. This collection of samples, credentials and endorsements will help you develop an appreciation for your experience and skills.
  • Try to find the lessons in your loss. In the case of job loss, the lesson is to evaluate and restructure your career priorities.
  • Practice empathy for difficult situations and people. The ability to understand how others act, think and live is a high-level skill. Moreover, this skill will help you gain employment. You can get another job if the employer believes you possess problem-solving abilities, and can empathize with others as it makes you more aware of and sensitive to the problems of others. Once you have recovered from the emotional aspects of job loss, you can direct your energy to searching for work with increased control and self-confidence.