The psychological significance of fairy tales has been one of the most pervasive topics in the history of fairy tale studies. There are many different theories concerning the fairy tale's psychological meaning and value, but most start with the premiss that the stories are symbolic expressions of the human mind and emotional experience. According to this view, fairy tale plots and motifs are not representations of socio-historical reality, but symbols of inner experience that provide insight into human behaviour. Consequently, the psychological approach to fairy tales involves symbolic interpretation, both for psychoanalysts, who use fairy tales diagnostically to illustrate psychological theories, and for folklorists and literary critics, who use psychological theories to illuminate fairy tales.
The psychological approach to fairy tales is usually associated with Freudian psychoanalysis and other 20th century theories. Sigmund Freud found fairy tales especially useful for illustrating his theories of the mind because they seemed so much like dreams. According to Freud, both fairy tales and dreams used symbols to express the conflicts, anxieties, and forbidden desires that had been repressed into the unconscious. Freud demonstrated that fairy tales used a symbolic language that could be interpreted psychoanalytically to reveal the latent or hidden content of the mind. For example, in his famous analysis of the Wolf Man, Freud noted that his patient's dreams used the same symbolism as the Grimms' stories of ‘The Wolf and the Seven Young Kids’ and ‘Little Red Riding Hood’ to express sexual anxiety resulting from traumatic childhood experiences.
Carl Gustav Jung, who had also been a disciple of Freud, developed a new branch of analytic psychology that has had an enormous impact on fairy tale scholarship and the popular reception of fairy tales. While Freudian psychoanalytic theory generally viewed pathological behaviours and symbolic expressions as manifestations of the individual's unconscious, Jung looked beyond pathology and beyond the individual mind for the source and meaning of symbols. According to Jung, the symbolic language of myths, dreams, and fairy tales was composed of timeless symbolic forms, which he called archetypes. From the Jungian perspective, archetypes were universal symbols showing the way to transformation and development.
His ideas have not only influenced the literary fairy tales of writers such as Hermann Hesse, they have also generated a great number of fairy tale interpretations.
The difference between the Freudian and Jungian approaches to symbols is especially well illustrated in Campbell's interpretation of ‘The Frog King’. Campbell reads ‘The Frog King’ not specifically as a story of sexual anxiety and maturation, as the Freudian theories had done, but as an illustration of the broader archetypal theme of the call to adventure—the individual's awakening to unconscious forces and a new stage of life.
The psycho-spiritual claims of Jungian analysis and anthroposophy are echoed in the many self-help books of fairy tale interpretation published for the popular book trade, especially since the advent of New Age philosophy in the 1980s. Fairy tales are used to show readers how to achieve better relationships, self-confidence, self-acceptance, and other improvements in their lives. From a Christian perspective the American authors Ronda Chervin and Mary Neill published The Woman's Tale (1980), a self-help book of pop psychology that promotes the idea that reading fairy tales can help women develop their personal identities. From another perspective, Robert Bly's Iron John (1990) offers Grimms' tale as a story that helps men heal their psychic wounds and realize their true masculine personality.
Although the psychotherapeutic value of reading fairy tales is speculative, some analysts have presented case histories as evidence of the fairy tale's efficacy in treating patients. The Jungian analyst Hans Dieckmann, for example, advocated in many different publications the diagnostic and therapeutic importance of the Lieblingsmärchen—the favourite fairy tale—based on his clinical experience with patients. According to Dieckmann, the neuroses of adults are exposed in their favourite childhood stories. Consistent with his Jungian orientation, Dieckmann maintained that therapy is facilitated when the patient consciously recognizes the identity that exists between the personal psyche and the cosmos. On the other hand, the psychoanalyst Sándor Lorand used a case history in 1935 to point out that fairy tales experienced in childhood can also have adverse effects that cause psychological trauma. He cites in particular a patient whose fear of castration was traced to the tale of ‘Little Red Riding Hood’.
Typically, however, psychologists view the fairy tale as having a significant and positive role in the psychological development of children. These developmental psychologists consider the fairy tale not simply as a useful therapeutic tool in clinical practice, but as children's literature that should be part of every child's experience. The basic premiss is that children learn how to overcome psychological conflicts and grow into new phases of development through a symbolic comprehension of the maturation process as expressed in fairy tale. Walter Scherf claimed that magic tales are dramas of family conflict in which children can identify their own problems. According to Scherf, these magic stories engage the dramatic imagination of children and allow them to overcome their conflicts, separate from the parents, and integrate themselves into society.
F. André Favat's study of Child and Tale (1977) used Jean Piaget's ideas about the stages of development to consider the affinity between fairy tales and child psychology. What draws the child to the fairy tale, according to Favat, is not the opportunity to confront conflicts symbolically as part of the socialization process. Instead, the fairy tale relaxes the tensions brought on by socialization and change, and provides a fictional realm where children can re-experience the pleasure of a magical, egocentric world ordered according to their desires.
Postmodern literary fairy tales for adults have also stimulated new ways of thinking about fairy tales and psychology. Peter Straub, for example, links fairy tale violence with child abuse. Such modern revisions challenge readers to rethink classical psychoanalytic premisses and search for new models to understand the psychological implications of the fairy tale in social, historical, and cultural contexts.