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The Effect of Depression on Labor Market Outcomes

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Listed author(s):
  • Lizhong Peng
  • Chad D. Meyerhoefer
  • Samuel H. Zuvekas

Abstract

We estimated the effect of depression on labor market outcomes using data from the 2004-2009 Medical Expenditure Panel Survey. After accounting for the endogeneity of depression through a correlated random effects panel data specification, we found that depression reduces the likelihood of employment. We did not, however, find evidence of a causal relationship between depression and hourly wages or weekly hours worked. Our estimates are substantially smaller than those from previous studies, and imply that depression reduces the probability of employment by 2.6 percentage points. In addition, we examined the effect of depression on work impairment and found that depression increases annual work loss days by about 1.4 days (33 percent), which implies that the annual aggregate productivity loses due to depression-induced absenteeism range from $700 million to 1.4 billion in 2009 USD.

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File URL: http://www.nber.org/papers/w19451.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 19451.

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Date of creation: Sep 2013
Handle: RePEc:nbr:nberwo:19451
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Find related papers by JEL classification:

  • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
  • I10 - Health, Education, and Welfare - - Health - - - General
  • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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  12. Jason M. Fletcher, 2010. "Adolescent depression and educational attainment: results using sibling fixed effects," Health Economics, John Wiley & Sons, Ltd., vol. 19(7), pages 855-871.
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Cited by:

  1. Dr Alex Bryson, 2014. "Biomarkers and Long-term Labour Market Outcomes: The Case of Creatine," NIESR Discussion Papers 425, National Institute of Economic and Social Research.
  2. Melisa Bubonya & Deborah A. Cobb-Clark & David C. Ribar, 2017. "The Bilateral Relationship between Depressive Symptoms and Employment Status," Melbourne Institute Working Paper Series wp2017n10, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  3. Daniel Hojman & Alvaro Miranda & Jaime Ruiz-Tagle, 2013. "Over Indebtedness and Depression: Sad Debt or Sad Debtors?," Working Papers wp385, University of Chile, Department of Economics.
  4. Petri Bockerman & Alex Bryson & Christian Hakulinen & Jaakko Pehkonen & Laura Pulkki-Raback & Olli Raitakari & Jutta Viinikainen, 2014. "Biomarkers and Long-term Market Outcomes: The Case of Creatine," CEP Discussion Papers dp1279, Centre for Economic Performance, LSE.
  5. Ayyagari, Padmaja & Shane, Dan M., 2015. "Does prescription drug coverage improve mental health? Evidence from Medicare Part D," Journal of Health Economics, Elsevier, vol. 41(C), pages 46-58.

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