The loneliness recession: How economic insecurity isolates Australians

CHE RESEARCH BITES

By Johannes S. Kunz, Anh Trinh and colleagues

11 September, 2025

Loneliness is increasingly recognised as a public health issue, with severe economic, health, and social costs. A new study from Monash Business School's Centre for Health Economics examines how recessions and job insecurity affect loneliness in Australia, where one in three adults report feeling lonely and one in six experiences severe loneliness.

Using nearly two decades of data from the nationally representative HILDA survey, the study finds that unemployment increases the risk of loneliness by almost 19%. Even the fear of losing a job raises loneliness, showing that economic insecurity itself—beyond actual job loss—erodes social well-being. These effects are not short-lived: loneliness persists for several years after an unemployment spell.

The burden is especially heavy on people with chronic health conditions and mental health disorders, who face additional financial and mobility constraints that magnify isolation. While social support networks help, they cannot fully offset the loneliness triggered by economic downturns.

The findings arrive as concerns about social isolation gain policy attention in Australia. Earlier this year, New South Wales announced a $10 million community program to combat loneliness among young people and older adults, while Victoria’s health services have warned of rising demand linked to cost-of-living pressures. These initiatives echo the study’s conclusion that economic stability and social connection policies must go hand in hand.

Addressing loneliness requires both targeted financial assistance for those who lose work and broader strategies to foster community participation. Without such efforts, recessions risk leaving lasting scars not only on economic security but also on Australians’ social and emotional health.

Kunz JS, Trinh TA, Berk M, Earnest A, Engel L, Hamilton M, Hayes L, Le LK-D, Lim M, Rizal F, Skouteris H, Shields MA, Mihalopoulos C. Are recessions bad for loneliness? Social Science & Medicine. 2025 Aug;384:118500.

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