The Impact of Psychiatric Disorders on Employment Across Sectors in Taiwan

Taiwan’s 1997 Disabled Citizens Protection Act required organizations to meet minimum employment rates for people with physical or psychiatric disabilities, with lower quotas for the private sector. This study investigates whether the impact of psychiatric disorders, including affective and anxiety disorders, on employment differed across sectors in 2005. Data are drawn from Taiwan's 2005 National Health Interview Survey. The analysis primarily adopts a multinomial probit approach to estimate impacts across sectors among adults aged 18 to 64 by gender. To consider potential endogeneity, it pursues an augmented regression approach. The instrumental variable is the community prevalence of psychiatric disorders. Both exogenous and endogenous results consistently indicate serious consequences in the private sector, especially in its subsector of employed, rather than the public sector, for both males and females. Improving employment for individuals with psychiatric disorders in the private sector, especially for private sector employees, remains a challenge. JEL classification numbers: I18, J21, J24.