The events that unfolded towards the end of 2008 led to the worst global economic crisis since the Great Depression of the 1930s. While the economic and political implications have been studied in detail, the impact on health – especially that of mental health – has received much less attention. This essay aims to achieve a critical evaluation of causality (or lack thereof) between an economic crisis and mental health, using a combination of psychological theories, statistical review and common logic.

From a theoretical perspective, establishing the value-laden concept of mental health is core to this evaluation. We reflect on Professor Warr's component-based model of mental health and how/whether the economic downturn relates to these ‘components’ individually. On the statistical front, an analysis of data from previous global economic crises reveals a close association between job-related insecurities and psychological morbidities.

We found that both psychological theory and epidemiological data support causation between a recession and conditions like depression, anxiety and substance abuse. Further, we also explore the effects of the crisis on the family unit, society and international relations. This will highlight issues like child abuse, the psychological impacts on the socially deprived, and effects of the crisis on the developing world.

We also review the effectiveness of efforts of different nature and magnitude to mitigate the effects of this downturn. All this will hopefully impact on our understanding of the causes of mental health problems in times of economic insecurity and assist in developing strategies to ameliorate them.