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The Impact of Psychiatric Disorders on Labor Market Outcomes

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  • Susan L. Ettner
  • Richard G. Frank
  • Ronald C. Kessler
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    Abstract

    Data on 2225 men and 2401 women from the National Comorbidity Survey were used to examine the impact of psychiatric disorders on employment and conditional work hours and income. Two-stage instrumental variables methods were used to correct for the potential endogeneity of psychiatric disorders. The instruments used (the psychiatric disorder history of the respondent and respondent's parents) passed tests of the overidentifying restrictions. Psychiatric disorders significantly reduced employment among both men and women. Evidence was also found of small reductions in the conditional work hours of men and a substantial drop in the conditional earnings of men and women, although these findings were somewhat more sensitive to the estimation methods and specification of the model.

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    Bibliographic Info

    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 5989.

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    Date of creation: Apr 1997
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    Publication status: published as Industrial and Labor Relations Review, Vol. 51, no. 1 (October 1997): 64-81 .
    Handle: RePEc:nbr:nberwo:5989

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    1. Grossman, Michael, 1972. "On the Concept of Health Capital and the Demand for Health," Journal of Political Economy, University of Chicago Press, vol. 80(2), pages 223-55, March-Apr.
    2. Bartel, Ann & Taubman, Paul, 1986. "Some Economic and Demographic Consequences of Mental Illness," Journal of Labor Economics, University of Chicago Press, vol. 4(2), pages 243-56, April.
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    4. Mullahy, John & Sindelar, Jody L, 1991. "Gender Differences in Labor Market Effects of Alcoholism," American Economic Review, American Economic Association, vol. 81(2), pages 161-65, May.
    5. Bartel, Ann & Taubman, Paul, 1979. "Health and Labor Market Success: The Role of Various Diseases," The Review of Economics and Statistics, MIT Press, vol. 61(1), pages 1-8, February.
    6. Mullahy, John & Sindelar, Jody L, 1993. "Alcoholism, Work, and Income," Journal of Labor Economics, University of Chicago Press, vol. 11(3), pages 494-520, July.
    7. Ezzy, Douglas, 1993. "Unemployment and mental health: A critical review," Social Science & Medicine, Elsevier, vol. 37(1), pages 41-52, July.
    8. Robert Kaestner, 1990. "The Effect of Illicit Drug Use on the Wages of Young Adults," NBER Working Papers 3535, National Bureau of Economic Research, Inc.
    9. Richard Frank & Paul Gertler, 1991. "An Assessment of Measurement Error Bias for Estimating the Effect of Mental Distress on Income," Journal of Human Resources, University of Wisconsin Press, vol. 26(1), pages 154-164.
    10. French, Michael T. & Zarkin, Gary A., 1995. "Is moderate alcohol use related to wages? Evidence from four worksites," Journal of Health Economics, Elsevier, vol. 14(3), pages 319-344, August.
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