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The Short‐Term Effect of Depressive Symptoms on Labor Market Outcomes

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  • Lizhong Peng
  • Chad D. Meyerhoefer
  • Samuel H. Zuvekas

Abstract

We estimated the short‐term effects of symptoms of depression on labor market outcomes using data from the 2004–2009 Medical Expenditure Panel Survey. After accounting for the endogeneity of depression through a correlated random effects panel data specification, we found that exhibiting depressive symptoms reduces the likelihood of employment. We did not, however, find evidence of a causal relationship between depressive symptoms and hourly wages or weekly hours worked. Our estimates are substantially smaller than those from previous studies and imply that depressive symptoms reduce the contemporaneous probability of employment by 2.4 percentage points. In addition, we examined the effect of depression on work impairment and found that exhibiting depressive symptoms increases annual work loss days by about 1.4 days (33%), which implies that the annual aggregate productivity loses because of depression‐induced absenteeism range from $900m to $1.9bn in 2009 USD. Copyright © 2015 John Wiley & Sons, Ltd.

Suggested Citation

  • Lizhong Peng & Chad D. Meyerhoefer & Samuel H. Zuvekas, 2016. "The Short‐Term Effect of Depressive Symptoms on Labor Market Outcomes," Health Economics, John Wiley & Sons, Ltd., vol. 25(10), pages 1223-1238, October.
  • Handle: RePEc:wly:hlthec:v:25:y:2016:i:10:p:1223-1238
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    Cited by:

    1. Daniel Hojman & Alvaro Miranda & Jaime Ruiz-Tagle, 2013. "Over Indebtedness and Depression: Sad Debt or Sad Debtors?," Working Papers wp385, University of Chile, Department of Economics.
    2. Böckerman, Petri & Bryson, Alex & Viinikainen, Jutta & Hakulinen, Christian & Pulkki-Råback, Laura & Raitakari, Olli & Pehkonen, Jaakko, 2017. "Biomarkers and long-term labour market outcomes: The case of creatine," Journal of Economic Behavior & Organization, Elsevier, vol. 142(C), pages 259-274.
    3. Petri Bockerman & Alex Bryson & Christian Hakulinen & Jaakko Pehkonen & Laura Pulkki-Raback & Olli Raitakari & Jutta Viinikainen, 2014. "Biomarkers and Long-term Market Outcomes: The Case of Creatine," CEP Discussion Papers dp1279, Centre for Economic Performance, LSE.
    4. Melisa Bubonya & Deborah A. Cobb-Clark & David C. Ribar, 2017. "The Bilateral Relationship between Depressive Symptoms and Employment Status," Melbourne Institute Working Paper Series wp2017n10, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    5. Ayyagari, Padmaja & Shane, Dan M., 2015. "Does prescription drug coverage improve mental health? Evidence from Medicare Part D," Journal of Health Economics, Elsevier, vol. 41(C), pages 46-58.

    More about this item

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • I10 - Health, Education, and Welfare - - Health - - - General
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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