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Heterogeneity and the effect of mental health parity mandates on the labor market

Martin Andersen ()

Journal of Health Economics, 2015, vol. 43, issue C, 74-84

Abstract: Health insurance benefit mandates are believed to have adverse effects on the labor market, but efforts to document such effects for mental health parity mandates have had limited success. I show that one reason for this failure is that the association between parity mandates and labor market outcomes vary with mental distress. Accounting for this heterogeneity, I find adverse labor market effects for non-distressed individuals, but favorable effects for moderately distressed individuals and individuals with a moderately distressed family member. On net, I conclude that the mandates are welfare increasing for moderately distressed workers and their families, but may be welfare decreasing for non-distressed individuals.

Keywords: Mental health; Benefit mandates; Insurance; Labor supply (search for similar items in EconPapers)
JEL-codes: I13 I18 (search for similar items in EconPapers)
Date: 2015
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DOI: 10.1016/j.jhealeco.2015.06.008

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Journal of Health Economics is currently edited by J. P. Newhouse, A. J. Culyer, R. Frank, K. Claxton and T. McGuire

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