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Getting Stuck in the Blues: Persistence of Mental Health Problems in Australia

  • Roy, John

    (Victoria University of Wellington)

  • Schurer, Stefanie


    (University of Sydney)

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    Do episodes of mental health problems cause future mental health problems, and if yes, how strong are these dynamics? We quantify the degree of persistence in mental health problems using nationally-representative, longitudinal data from Australia and system GMM-IV and correlated random effects approaches are applied to separate true from spurious state dependence. Our results suggest only a moderate degree of persistence in mental health problems when assuming that persistence is constant across the mental health distribution once individual-specific heterogeneity is accounted for. However, individuals who fell once below a threshold that indicates an episode of depression are up to five times more likely to experience such a low score again a year later, indicating a strong element of state dependence in depression. Low income is a strong risk factor in state dependence for both men and women, which has important policy implications.

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    Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7451.

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    Length: 32 pages
    Date of creation: Jun 2013
    Date of revision:
    Publication status: published in: Health Economics, 2013, 22(9), 1139-1157.
    Handle: RePEc:iza:izadps:dp7451
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