Economic deprivation and the psychological impact of unemployment

This article presents a selective review of theory and research that considers the effects of financial hardship and economic deprivation on unemployed individuals and their families. Research from the 1930s and studies dealing with contemporary unemployment are discussed. The results of further analysis of two previously reported Flinders studies are presented. It is concluded that financial hardship and economic deprivation set limits to the extent to which the unemployed person can fulfil needs and values and move towards important future goals. The effects of both economic variables and psychological variables on the psychological wellbeing and life satisfaction of unemployed people may be related to motivational theories that take into account person variables such as needs, values, and expectations, and environmental variables that hinder or facilitate both the satisfaction of basic motives and goal-directed behaviour.