Career Effects of Mental Health

Petra Moser, Barbara Biasi and Michael Dahl

No 16401, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper investigates the career effects of mental health, focusing on depression, schizophrenia, and bipolar disorder (BD). Individual-level registry data from Denmark show that these disorders carry large earnings penalties, ranging from 34 percent for depression and 38 percent for BD to 74 percent for schizophrenia. To investigate the causal effects of mental health on a person’s career, we exploit the approval of lithium as a maintenance treatment for BD in 1976. Baseline estimates compare career outcomes for people with and without access in their 20s, the typical age of onset for BD. These estimates show that access to treatment eliminates one third of the earnings penalty associated with BD and greatly reduces the risks of low or no earnings. Importantly, access to treatment closes more than half of the disability risk associated with BD.

Keywords: Mental health; Earnings; And disability (search for similar items in EconPapers)
JEL-codes: I12 J23 J24 M13 O31 (search for similar items in EconPapers)
Date: 2021-07
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Working Paper: Career Effects of Mental Health (2021)
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