David Johnston, Monash University - Impacts of Droughts on Economic and Mental Wellbeing

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Melbourne Institute Seminar

Title: Impacts of Droughts on Economic and Mental Wellbeing

Abstract: Many countries suffer from severe droughts, and it is predicted that they'll become more frequent with forecasted changes in climatic conditions. In agricultural regions, drought is often anecdotally associated with considerable economic stress and worsening mental health. However, robust evidence on the overall microeconomic effects of drought, particularly from high-income countries, is limited. In this study, we use panel data from large administrative databases to estimate the economic and mental health impacts of Australian droughts on farmers, their families, and their broader communities. Results indicate that droughts in agricultural areas have large negative effects on the incomes of farmers, moderate negative effects on other agricultural workers, and small approximately zero effects on non-agricultural workers. Crucially, the negative economic shocks on agricultural workers are psychologically harmful, with estimates indicating large increases in suicides. In contrast, we find no changes in GP and allied health service use, and only small increases in the use of antidepressant and anxiolytic medication. The large increase in suicides and the small changes in healthcare use suggest that mentally unwell agricultural workers are not receiving the treatment they need.

Presenter: David Johnston, Monash University

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