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

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  • Marcotte, Dave E.
  • Wilcox-Gök, Virginia

Abstract

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.

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Bibliographic Info

Article provided by Elsevier in its journal Social Science & Medicine.

Volume (Year): 53 (2001)
Issue (Month): 1 (July)
Pages: 21-27

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Handle: RePEc:eee:socmed:v:53:y:2001:i:1:p:21-27

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Related research

Keywords: Employment Friction costs Human capital Indirect costs Mental illness United States;

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Cited by:
  1. Marie-Josée J. Mangen & G. Ardine de Wit & Arie H. Havelaar, 2007. "Economic analysis of Campylobacter control in the dutch broiler meat chain," Agribusiness, John Wiley & Sons, Ltd., vol. 23(2), pages 173-192.
  2. Julien O. Teitler & Nancy E. Reichman, 2007. "Mental Illness as a Barrier to Marriage Among Mothers With Out-of-Wedlock Births," Working Papers 907, Princeton University, Woodrow Wilson School of Public and International Affairs, Center for Research on Child Wellbeing..
  3. Kristin Turney, 2008. "Parental Depression and Children’s Developmental Outcomes: The Mediating Influence of Parenting Behavior," Working Papers 1129, Princeton University, Woodrow Wilson School of Public and International Affairs, Center for Research on Child Wellbeing..
  4. David W. Johnston; & Stefanie Schurer; & Michael Shields;, 2012. "Evidence on the long shadow of poor mental health across three generations," Health, Econometrics and Data Group (HEDG) Working Papers, HEDG, c/o Department of Economics, University of York 12/20, HEDG, c/o Department of Economics, University of York.
  5. Pinka Chatterji & Margarita Alegria & Mingshan Lu & David Takeuchi, 2005. "Psychiatric Disorders and Labor Market Outcomes: Evidence from the National Latino and Asian American Study," NBER Working Papers 11893, National Bureau of Economic Research, Inc.
  6. Ludwig, Jens & Marcotte, Dave E. & Norberg, Karen, 2009. "Anti-depressants and suicide," Journal of Health Economics, Elsevier, vol. 28(3), pages 659-676, May.
  7. Kristin Turney, 2010. "Maternal Depression and Childhood Health Inequalities," Working Papers 1249, Princeton University, Woodrow Wilson School of Public and International Affairs, Center for Research on Child Wellbeing..
  8. Juan Oliva-Moreno, 2012. "Loss of labour productivity caused by disease and health problems: what is the magnitude of its effect on Spain’s Economy?," The European Journal of Health Economics, Springer, Springer, vol. 13(5), pages 605-614, October.
  9. Farahati, F. & Marcotte, D. E. & Wilcox-Gok, V., 2003. "The effects of parents' psychiatric disorders on children's high school dropout," Economics of Education Review, Elsevier, Elsevier, vol. 22(2), pages 167-178, April.
  10. Greve, Jane & Nielsen, Louise Herrup, 2013. "Useful beautiful minds—An analysis of the relationship between schizophrenia and employment," Journal of Health Economics, Elsevier, vol. 32(6), pages 1066-1076.

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