Working Paper: NBER ID: w29031
Authors: Barbara Biasi; Michael S. Dahl; Petra Moser
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; Bipolar disorder; Earnings penalties; Treatment access
JEL Codes: I12; J23; J24; O31
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) | Improvement in career outcomes for those receiving treatment (J68) |
| Access to treatment (I14) | Decreased risk of falling into bottom earnings decile (D31) |
| Access to treatment (I14) | Decreased risk of zero earnings (J17) |
| Mental health symptoms (I12) | Earnings penalties for individuals with BD (J32) |
| Access to treatment (I14) | Reduction in excess disability risk (G52) |
| Socioeconomic status (I24) | Greater improvements in earnings upon receiving treatment (I26) |