The impact of austerity policies on the wellbeing of individuals in Europe

Funding Body – Leverhulme trust

Research Team

Alberto Montagnoli (PI)
Sarah Brown
Alexandros Kontonikas, University of Glasgow
Mirko Moro, University of Stirling
Luisanna Onnis (RA)


The project aims to provide some novel evidence on the link between restrictive macroeconomic fiscal policies (commonly known as austerity measures) and individual psychological (both hedonic and functional) wellbeing and (mental) health. The project bridges the literature on SWB with the macroeconomic literature on austerity. From a policy perspective, it is essential to evaluate whether austerity measures have negatively or positively affected individual wellbeing. If the loss is substantial and persistent, social policy should be well-informed before establishing strategic plans. Conversely, if the social cost of austerity is lower than typically assumed, social planners should be aware of this. If austerity causes a greater deterioration in individuals’ health during periods of financial crisis, policy-makers should arguably work even harder to return the unemployed to the labour market.