Does attention‐deficit hyperactivity disorder medication reduce entrepreneurship?

Juhana Peltonen, Edvard Johansson and Joakim Wincent

Health Economics, 2020, vol. 29, issue 9, 1071-1077

Abstract: Attention‐deficit hyperactivity disorder (ADHD) is a highly inheritable condition with a rather stable prevalence over time and geography, and it is associated with a broad range of negative life outcomes. Increasing knowledge on the condition has led to a growing trend of dampening ADHD symptoms through medication. Although this development has led to many positive outcomes, the broader societal implications are still poorly understood. In particular, person‐level studies suggest that ADHD‐like behavior may possess some advantages for engaging in entrepreneurship and the initiation of new businesses, which is considered a key activity for economic development. Using recent panel data from 11 countries and one special administrative region (SAR), we investigate if the increasing use of ADHD medication in adults is associated with an unintended outcome of reducing entrepreneurship. We find that a roughly one unit increase in the prevalence of adult ADHD medication is associated with a one unit decrease in limited liability company registrations per working age population. In practical terms, the effect of a one within‐country/SAR standard deviation increase of adult ADHD medication prevalence corresponds to a decrease in new business formation of 20% of its mean in the sample.

Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:wly:hlthec:v:29:y:2020:i:9:p:1071-1077

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