Estimating Earnings Losses Due to Mental Illness: A Quantile Regression Approach

In this paper, we examine the effects of mental illness on earnings by recognizing that effects may vary across the distribution of earnings. Using data from the National Comorbidity Survey, we employ a quantile regression estimator to identify the effects at key points in the earnings distribution. We find that earnings effects vary importantly across the distribution. While average effects are often not large, mental illness more commonly imposes earnings losses at the lower tail of the earnings distribution, especially for women. Consequently, mental illness can have larger negative impacts on economic outcomes than previously estimated, even if those effects are not uniform.This research was supported by the National Institute of Mental Health (R01-MH56463-01)

Do The Sick Retire Early? Chronic Illness, Asset Accumulation, and Early Retirement.

The authors thank Patricia Reagan, members of the Department of Economics at Northern Illinois University, and an anonymous referee for helpful comments.Our objective is to determine how chronic illness affects asset accumulation and retirement. Previous studies have found that poor health leads to early retirement, but those studies failed to look at the indirect impact of chronic illness on retirement. Using data from the Health and Retirement Study, we define an illness as chronic if the individual reports having asthma, cancer, heart disease, stroke or diabetes for four or more years. We first estimate how a chronic illness influences asset accumulation. We then estimate how asset accumulation and current poor health influence retirement. We observe that the vast majority of the chronically ill population do not report their general health to be poor nor do they report functional limitations in activities of daily living. Nevertheless, our results indicate that chronic illness leads these people to accumulate fewer assets during their working years and consequently retire later. Neither researchers nor policy-makers discussing the many critical issues surrounding illness and retirement have addressed this issue

The Effects of Parents' Psychiatric Disorders on Children's High School Dropout

Mental illness is known to impose substantial direct costs on the ill. In this paper, we examine an indirect cost of mental illness. We investigate the effect of parents’ mental illnesses on the schooling of their children. Using data from the National Comorbidity Survey, we find that parents’ mental illnesses increase the probability of high school dropout of children, though these effects differ markedly with disease. We also find that parental mental illness has more consistently negative effects on girls than on boys. These findings indicate that parental mental illness can have a powerful impact on children’s schooling and subsequently on their adult lives. The larger impact on girls’ schooling compounds the greater earnings and employment losses due to mental illness borne by adult women. Our results suggest that policies designed to mitigate the effects of parental mental illness on children’s schooling attainment are potentially efficient uses of society’s resources

Prevalence and Patterns of Major Depressive Disorder in the United States Labor Force

Background and Aims of the Study: In this paper, we identify the 12-month and lifetime prevalence of major depressive disorder in and out of the labor force, and among the employed and unemployed. We examine whether prevalence by labor force and employment status varies by gender and over the life cycle. Finally, we examine whether people can ‘recover’ from depression with time by identifying patterns of labor force participation and employment as time since most recent episode passes. Methods: We examine data collected as part of the National Comorbidity Survey, a survey representative of the population of the United States designed to identify the prevalence of major mental illnesses. The National Comorbidity Study identified cases of major depression via the Composite International Diagnostic Interview. Using these data, we estimate univariate and bivariate frequency distributions of major depressive disorder. We also estimate a set of multivariate models to identify the effect of a variety of dimensions of major depression on the propensity to participate in the labor force, and be employed if participating. Results: Lifetime and 12-month prevalence rates of depression are similar in and out of the labor force. Within the labor force, however, depression is strongly associated with unemployment. The negative relationship between depressive disorder and employment is particularly strong for middle age workers. Depression and the number of depressive episodes have a differing pattern of effects on labor market outcomes for men and women. We find evidence that labor force participation and employment rates for people with a history of depression increase significantly over time in the absence of additional depressive episodes. Discussion: Labor market status represents an important dimension along which prevalence of major depression varies. The relationship between depression and employment status is particularly strong for middle aged persons, but becomes weaker as time passes since the last depressive episode. Continued exploration of the association between work (or lack of work) and depression may ultimately help in the prediction, treatment and assessment of the illness. Implications for Practice and Policy: These results present a basic set of facts about the relationship between major depressive disorder and labor market outcomes. We have not, however, attempted to sort out the complexities of this relationship here. These complexities arise at almost every turn. For instance, the high level of prevalence of depression among the unemployed may be due to the possibility that the stresses associated with unemployment trigger depressive episodes or to the possibility that workers who are depressed are more likely to be fired or quit. Implications for Further Research: Our continuing research attempts to address these problems. Understanding when and how depression affects labor market outcomes and when and how labor market outcomes affect depression is an important endeavor for those interested in treating the disease and understanding its consequences.Funded by National Institute of Mental Health. Grant Number: R01-MH56463-0

The Economic Performance of For-Profit and Not-for-Profit Hospitals

The author is grateful to J. Rubin and L. Russell for comments and Lisa Parochniak for research assistance.This research examines whether for-profit status or system membership is significantly related to the financial performance of hospitals. Panel data containing 573 observations of Florida hospitals for 1984 through 1987 are used in a fixed-effects regression model. The results indicate that it is system membership rather than forprofit status that is significantly related to better financial performance. For-profit status is unrelated to overall financial performance. System hospitals have higher revenues per admission, but not higher expenditures per admission than independent hospitals. The findings are consistent with the hypothesis that expanding hospital systems target locations and services that are potentially profitable.Support from the Rutgers University Research Council and NIMH Grant No. 43450-01 is gratefully acknowledged

Health insurance coverage among the elderly

The research reported in this paper examines the decision to have private health insurance by elderly Medicare enrollees. Models allowing both stimultaneity and a joint error structure between health insurance and use of medical care are considered. We find that common unobserved variables underlying the joint errors are important determinants in the decision to purchase private health insurance. Simultaneity is present only between the decision to have private health insurance and the probability of visiting a doctor. Health status and functional limitations are important determinants of the decision to have private health insurance in addition to Medicare coverage. Other personal characteristics (age, sex, race and education), as well as household income, Medicaid enrollment, and the employment of a family member are also found to be related to the decision to have private health insurance.Medicare elderly health insurance

Estimating the employment and earnings costs of mental illness: recent developments in the United States

Substantial attention has recently been focused on both the prevalence and consequences of mental illness. Generally, public interest in the costs of mental illness has been limited to the direct costs of treating the mentally ill. In this paper, we consider the magnitude and importance of a major component of the indirect costs of mental illness: employment and earnings losses. We first describe the technical difficulties involved in estimating these costs. We then describe new data and recent advances in the United States that have improved our ability to make such estimates. Our conclusions from the recent research are that each year in the United States 5-6 million workers between the ages of 16 and 54 lose, fail to seek, or cannot find employment as a consequence of mental illness. Among those who do work, we estimate that mental illness decreases annual income by an amount between $3500 and$6000. We then discuss an emerging challenge to the traditional method for arriving at such estimates: the friction cost approach. We describe both the conceptual and technical differences between the friction cost method and the traditional human capital approach. We conclude that while economic context has much to do with whether one relies on human capital or friction cost estimates, each can offer useful information about labor market losses due to mental illness.Employment Friction costs Human capital Indirect costs Mental illness United States