Leaving school early: a mediation analysis linking adolescent mental health disorders to early adult outcomes

This paper examines the role of dropping out of school in the association between adolescent mental health disorders (MHDs) and subsequent early-life outcomes. Utilising an administrative panel dataset that links education, health, and employment records for half of the Hungarian school population, we track the life outcomes of a school cohort until age 22. Our findings indicate that adolescents diagnosed with an MHD between the ages of 14 and 16 are 5.8 percentage points (or 34%) more likely to drop out of secondary school compared to their peers, even after controlling for social background factors and educational performance. Furthermore, MHDs are associated with poorer early-life outcomes by age 22, including reduced employment rates, an increased likelihood of being neither in education nor employment, lower wages, and higher probabilities of motherhood, abortions, sexually transmitted diseases, and substance abuse. On average, approximately a third of these negative associations are mediated through school dropout but there are substantial differences across these outcomes. We conclude that educational policies aimed at facilitating the school-to-life transition should simultaneously address mental health disorders and dropout prevention.