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Mental Health, Human Capital and Labor Market Outcomes

Author

Listed:
  • Christopher Cronin

    () (Department of Economics, University of Notre Dame)

  • Matthew Forsstrom

    () (Wheaton College)

  • Nicholas Papageorge

    () (Department of Economics, Johns Hopkins University)

Abstract

There are two primary treatment alternatives available to those with mild to moderate depression or anxiety: psychotherapy and medication. The medical literature and our analysis suggests that in many cases psychotherapy, or a combination of therapy and medication, is more curative than medication alone. However, few individuals choose to use psychotherapy. We develop and estimate a dynamic model in which individuals make sequential medical treatment and labor supply decisions while jointly managing mental health and human capital. The results shed light on the relative importance of several drawbacks to psychotherapy that explain patients' reluctance to use it: (1) therapy has high time costs, which vary with an individual's opportunity cost of time and flexibility of the work schedule; (2) therapy is less standardized than medication, which results in uncertainty about its productivity for a given individual; and (3) therapy is expensive. The estimated model is used to simulate the impacts of counterfactual policies that alter the costs associated with psychotherapy.

Suggested Citation

  • Christopher Cronin & Matthew Forsstrom & Nicholas Papageorge, 2017. "Mental Health, Human Capital and Labor Market Outcomes," CINCH Working Paper Series 1704, Universitaet Duisburg-Essen, Competent in Competition and Health.
  • Handle: RePEc:duh:wpaper:1704
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    File URL: https://cinch.uni-due.de/fileadmin/content/research/workingpaper/1610_CINCH-Series_cronin.pdf
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    References listed on IDEAS

    as
    1. Donna B. Gilleskie, 1998. "A Dynamic Stochastic Model of Medical Care Use and Work Absence," Econometrica, Econometric Society, vol. 66(1), pages 1-46, January.
    2. Kleibergen, Frank & Paap, Richard, 2006. "Generalized reduced rank tests using the singular value decomposition," Journal of Econometrics, Elsevier, vol. 133(1), pages 97-126, July.
    3. David M. Blau & Donna B. Gilleskie, 2008. "The Role Of Retiree Health Insurance In The Employment Behavior Of Older Men," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(2), pages 475-514, May.
    4. Irving Kirsch & Brett J Deacon & Tania B Huedo-Medina & Alan Scoboria & Thomas J Moore & Blair T Johnson, 2008. "Initial Severity and Antidepressant Benefits: A Meta-Analysis of Data Submitted to the Food and Drug Administration," PLOS Medicine, Public Library of Science, vol. 5(2), pages 1-9, February.
    5. Khwaja, Ahmed, 2010. "Estimating willingness to pay for medicare using a dynamic life-cycle model of demand for health insurance," Journal of Econometrics, Elsevier, vol. 156(1), pages 130-147, May.
    6. Jason M. Fletcher, 2008. "Adolescent depression: diagnosis, treatment, and educational attainment," Health Economics, John Wiley & Sons, Ltd., vol. 17(11), pages 1215-1235, November.
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    Cited by:

    1. Rossin-Slater, Maya & Schnell, Molly & Schwandt, Hannes & Trejo, Sam & Uniat, Lindsey, 2019. "Local Exposure to School Shootings and Youth Antidepressant Use," IZA Discussion Papers 12837, Institute of Labor Economics (IZA).
    2. Barone, Adriana & Barra, Cristian, 2019. "Weight status and mental health in Italy: Evidence from EHIS2 microdata," MPRA Paper 96703, University Library of Munich, Germany.

    More about this item

    Keywords

    Mental Health; Demand for Medical Care; Labor Supply; Structural Models;

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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