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The Effect of Psychological Distress on Wage and Labour Market Participation in Australia : A Longitudinal Analysis Using 8 Annual Waves of the HILDA Cohort

Author

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  • Isailovic, Natalija

    (Monash University)

Abstract

This paper investigates the impact of psychological distress on hourly wages and labour market participation within the Australian population, focusing on gender differences. The findings indicate that psychological distress significantly affects labour market outcomes, with varying effects based on gender and mental health status. Specifically, psychological distress significantly decreased hourly wages for healthy males and unhealthy females. An increase in labour market participation amongst mentally unhealthy males and both healthy and unhealthy females was also found. The research utilised data from biennial waves between 2007 and 2021, sourced from the Household, Income and Labour Dynamics in Australia (HILDA) survey.

Suggested Citation

  • Isailovic, Natalija, 2024. "The Effect of Psychological Distress on Wage and Labour Market Participation in Australia : A Longitudinal Analysis Using 8 Annual Waves of the HILDA Cohort," Warwick-Monash Economics Student Papers 78, Warwick Monash Economics Student Papers.
    • Handle: RePEc:wrk:wrkesp:78
    as

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    File URL: https://warwick.ac.uk/fac/soc/economics/research/wmesp/manage/78_-_isailovic.pdf
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    References listed on IDEAS

    as
    1. Ghislain B D Aihounton & Arne Henningsen, 2021. "Units of measurement and the inverse hyperbolic sine transformation," The Econometrics Journal, Royal Economic Society, vol. 24(2), pages 334-351.
    2. N. Vecchio & G. Mihala & J. Sheridan & M. F. Hilton & H. Whiteford & P. A. Scuffham, 2014. "A link between labor participation, mental health and class of medication for mental well-being," Economic Analysis and Policy, Elsevier, vol. 44(4), pages 376-385.
    3. Elena Lagomarsino & Alessandro Spiganti, 2020. "No gain in pain: psychological well-being, participation, and wages in the BHPS," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 21(9), pages 1375-1389, December.
    4. Germinario, Giuseppe & Amin, Vikesh & Flores, Carlos A. & Flores-Lagunes, Alfonso, 2022. "What can we learn about the effect of mental health on labor market outcomes under weak assumptions? Evidence from the NLSY79," Labour Economics, Elsevier, vol. 79(C).
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Psychological distress ; labour market participation ; hourly wage ; gender ; Australia ; HILDA JEL classifications: I12 ; I31 ; J17; J22;
    All these keywords.

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • J17 - Labor and Demographic Economics - - Demographic Economics - - - Value of Life; Foregone Income
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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