Working Paper: CEPR ID: DP16401
Authors: Petra Moser; Barbara Biasi; Michael S. Dahl
Abstract: This paper investigates the career effects of mental health, focusing on depression,schizophrenia, and bipolar disorder (BD). Individual-level registry data from Denmark showthat these disorders carry large earnings penalties, ranging from 34 percent for depression and38 percent for BD to 74 percent for schizophrenia. To investigate the causal effects of mentalhealth on a person’s career, we exploit the approval of lithium as a maintenance treatment forBD in 1976. Baseline estimates compare career outcomes for people with and without accessin their 20s, the typical age of onset for BD. These estimates show that access to treatmenteliminates one third of the earnings penalty associated with BD and greatly reduces the risksof low or no earnings. Importantly, access to treatment closes more than half of the disabilityrisk associated with BD.
Keywords: Mental Health; Earnings; Disability
JEL Codes: M13; J23; J24; O31; I12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Access to lithium treatment (F34) | Earnings penalty associated with bipolar disorder (J32) |
| Mental health disorders (I12) | Career outcomes (J62) |
| Access to treatment (I14) | Disability risk associated with bipolar disorder (I12) |
| Symptoms affecting work ability (I12) | Earnings penalties for individuals with mental health disorders (J32) |
| Access to treatment (I14) | Adverse labor market effects of bipolar disorder (J79) |
| Individuals with mental health conditions (I12) | Healthy siblings (J12) |