Diverging destinies? A sibling fixed effects study on family background differences in the educational and economic consequences of childhood mental health disorders

Maria Vaalavuo, Chase Friel and Outi Sirniö

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Abstract: Mental health disorders (MHD) have increased significantly among children and youth. They are shown to be more common among children of low socioeconomic background and are associated with worse educational and labour market performance later in life. In this study, our primary objective is to investigate how childhood MHD measured at age 11–15 is associated with educational outcomes along the educational path as well as earnings at age 30, and the extent to which the associations are attenuated when controlling for academic achievement and later mental health. Secondly, we investigate whether the relationship is moderated by parental education and family income. Using rich longitudinal register data of the full population in Finland and sibling fixed effects models, we show that childhood MHD is associated with poorer educational outcomes at each step and lower earnings in early adulthood. The family moderation effects suggest that children of higher SES families face a larger penalty associated with MHD. The study contributes to the existing literature on social selection in health inequalities, accumulation of disadvantages over the life course, and sociological theories on intergenerational mechanisms. The strong negative consequences of early MHD on educational outcomes calls for more effective measures to prevent MHD, provide health services to those with MHD, and perhaps most realistically support those with MHD in schools and later education. Mental illness is likely to cause accumulation of disadvantage over the life course and is therefore an important aspect to understand individual disadvantage as well as social inequality.

Date: 2026-05-24
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Persistent link: https://EconPapers.repec.org/RePEc:osf:socarx:gehvw_v1

DOI: 10.31219/osf.io/gehvw_v1

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