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The Bilateral Relationship between Depressive Symptoms and Employment Status

Listed author(s):
  • Bubonya, Melisa

    ()

    (Melbourne Institute of Applied Economic and Social Research)

  • Cobb-Clark, Deborah A.

    ()

    (University of Sydney)

  • Ribar, David C.

    ()

    (University of Melbourne)

This paper analyzes the bilateral relationship between depressive symptoms and employment status. We find that severe depressive symptoms are partially a consequence of economic inactivity. The incidence of depressive symptoms is higher if individuals have been out of a job for an extended period. Men's mental health falls as they exit the labor force, while women's worsens only after they have been out of the labor force for a period of time. Entering unemployment is also associated with a substantial deterioration in mental health, particularly for men. We also find that severe depressive symptoms, in turn, lead to economic inactivity. Individuals are less likely to be labor force participants or employed if they experience severe depressive symptoms. Men's probability of being unemployed rises dramatically with the onset of depressive symptoms; women's unemployment is increased by protracted depressive symptoms.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 10653.

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Length: 51 pages
Date of creation: Mar 2017
Handle: RePEc:iza:izadps:dp10653
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