Across the world, developing countries are experiencing higher-than-expected inflation because of the monetary easing efforts by financial institutions to mitigate the challenges of the COVID-19 pandemic and associated economic crises. This situation has been further aggravated by trade disputes and political unrest due to the ongoing Russia-Ukraine war leading to global economic ripples. A recent report by the World Bank predicts that with the ongoing trend the global core inflation rate will reach up to 5 percent in 2023—nearly double the five-year average before the pandemic. This, coupled with the financial-market stress and changed consumer behavior would reduce the global Gross Domestic Product (GDP) growth to 0.5 percent in 2023; this is a 0.4 percent contraction which, in per-capita terms, would meet the technical definition of a global recession.
GDP, inflation, and unemployment rates are historically used as proxy indicators to explain the aftermath of any financial crisis like a recession. Slow economic growth or weaker market conditions affect all sections of the economy, though vulnerable sections face more severe and chronic repercussions. Such times lead to increased layoffs and high unemployment rates, similar to recent layoffs across various corporate firms. Subdued economic growth further leads to the premature closure of businesses with increased debt and repossessions translating into a shift in consumer sentiment. Such interrelated macroeconomic changes initiate a trickle-down effect, impacting the mental well-being of individuals, resulting in increased anxiety, distress, and mental health issues like depression, and suicide.
What does the research say on suicide in times of economic turmoil?
The rise in the suicide rate is often studied in association with poor economic performance indicators. This was first explained by Durkheim who termed such degrading societal conditions as a ‘degree of normlessness’ often leading to suicides. Similarly, other scholars have also linked the effect of economic factors in sociological settings to explain the behavior of individuals who die by suicide.
Men are at increased risk of mental health problems and death due to suicide during times of economic adversity. Persons who are unemployed are two to three times more likely to die by suicide than those who are employed. Further, studies show that a 1 percent increase in unemployment is associated with a 0.8 percent increase in suicides, especially among younger adults. This association of economic downturns with other risk factors of suicides was first observed across multiple western economies during the Great Depression and later in England and Wales during the economic crises around the 1990s. This period witnessed a marked increase in unemployment among men along with a simultaneous rise in violence, substance misuse, alcohol consumption, and suicide rates. Similar trends were noticed later in European and North American countries where the suicide rate went up by 6.7% resulting in at least 10,000 additional suicides between 2008 and 2010 after the global financial crisis. In the Indian scenario, the 1991 economic crisis which significantly impacted the Indian economy saw a parallel increase in the suicide rate from 9.2 to 9.9%Though the direct causality is uncertain, the association between these macroeconomic downturns and increased rates of suicides is plausible and cannot be ignored.
Implications on suicides in India, given the economic scenario
Recent economic policy decisions like demonetization and the introduction of GSTregimes have significantly impacted the informal, small scale and unorganized sectors of the Indian economy. These detrimental effects were further amplified during the pandemic period due to stringent restrictions on mobility and economic activities that brought the subdued economy to a screeching halt similar to recession-like conditions. The suicide rate in India increased during the initial phase of the pandemic showing a positive deflection above the trendline for the previous years. Suicides increased by 7.2 and 6.2 percent in 2020 and 2021 respectively with the suicide rate reaching an all-time high at 12 deaths per 100,000 in 2021.
The maximum brunt of the economic fallout was borne by the unorganized sectors like micro, small, and medium scale enterprises (MSME), and unskilled labour force such as daily wage earners which is also reflected in corresponding increased suicide cases among these cohorts. In 2020, the NCRB records reported the maximum number of suicide deaths among men were daily wage earners at 33,164 deaths which accounted for 30.55% of suicide deaths amongst all male professions. The other affected group among men was the businessman category where this proportion was 10.10%, corresponding to 10,963 deaths. Within the larger group of businessmen,73.3% of suicides were reported among vendors and tradesmen who were directly impacted by the lockdowns and economic restrictions during the start of the pandemic. The immediate effect of the pandemic-related economic crisis was an increase in suicides by 25% and 39% reported in two states, Maharashtra and Tamil Nadu respectively, which have the maximum number of registered MSMEs in 2020.
The subdued economic effect of the second wave of the pandemic saw a continued trend in suicide deaths among the Indian working class. In 2021, the corresponding NCRB records similarly showed 37,551 deaths among male daily wage earners, which accounted for 31.7% of suicide deaths among all male professions. A total of 11,273 deaths or 9.47% of all male professions were reported to be suicides by businessmen, out of which 68.9%or 7745 were of vendors and tradesmen. These additional mortalities attributed to the economic downturn are believed to be exacerbated further by the global slowdown and high inflation rate amidst the global geo-political tensions. Though the economy is recuperating there is a probability of a lag effect resulting in sustained high suicide rates over the next few years as was seen during the later years of the economic crisis of 1991.
Are there any solutions to address the economic downturn on suicide?
Various evidence-based economic policy action reforms stitching social justice and empowerment, labour laws, and other employment protection strategies have proved central to offsetting the impact of the economic downturn on suicide. An empirical study suggests that a marginal increase of 10 USD in active labor market programs can lower the effect of a proportionate rise in unemployment on suicide rates for specific age groups. Similar interventions like targeted and sustained welfare spending, debt relief, hiked minimum wage initiatives, revamping the labour market programs to ease market constraints facilitating the labour movement, and bulking social protections to strengthen the safety net of the marginalized populations have been proven effective to cope up the stress due to the economic changes. These strong pro-public social policies can offer assistance and security, which further boosts the community's resistance to economic shocks and mitigates the negative effects of job loss, unemployment, social status loss, and stress-related effects of economic downturns on mental health.
A positive move that could serve as the foundation for state-led suicide prevention initiatives is the recently unveiled National Suicide Prevention Strategy. To reduce the number of suicide deaths in the nation, multisectoral strategies have been advocated with equal vigor. However, the strategy seems shy to address the economic drivers of suicide. It emphasizes the need for appropriate budgeting and funding for on-the-ground implementation, but it fails to highlight the roles of interventions to reduce the negative impact of financial shocks on individuals and communities. The intrinsic complexity associated with suicide can only be addressed if structural risk factors, such as economic downturns, are also seen as important to the cause and remedies, such as economic security programs, are also included as corrective measures at the policy level.
Discussing suicides can be triggering for some. However, suicides are preventable. In case you feel distressed by the content or know someone in distress, call Sneha Foundation - 04424640050 (available 24x7) or iCall, the Tata Institute of Social Sciences' helpline - 9152987821, which is available Monday to Saturday from 10 am to 8 pm