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The Macroeconomics of Intergenerational Mental Health Dynamics

Author

Listed:
  • Boaz Abramson

    (Columbia GSB)

  • Job Boerma

    (University of Wisconsin-Madison)

  • Diego Daruich

    (University of Southern California)

  • Aleh Tsyvinski

    (Yale University)

Abstract

We develop a quantitative macroeconomic theory of child mental health. The theory is grounded in child psychiatry, formalized in a life-cycle heterogeneous agent model of child development, and disciplined using micro data on mental health of children and parents. Intergenerational transmission of mental illness arises due to both biological factors and parental behavior. Parents experiencing mental illness have negative expectations and lose time due to rumination. As a result, they invest less in their child's mental health. We use the model to evaluate policies designed to improve child mental health. We show that subsidizing mental health treatment for children generates sizable welfare gains.

Suggested Citation

  • Boaz Abramson & Job Boerma & Diego Daruich & Aleh Tsyvinski, 2026. "The Macroeconomics of Intergenerational Mental Health Dynamics," Cowles Foundation Discussion Papers 2528, Cowles Foundation for Research in Economics, Yale University.
    • Handle: RePEc:cwl:cwldpp:2528
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    File URL: https://cowles.yale.edu/sites/default/files/2026-05/d2528.pdf
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    References listed on IDEAS

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