Mental health, work incapacity and State transfers: an analysis of the British Household Panel Survey
The UK has experienced substantial increases in the number of individuals claiming work incapacity benefit (IB) and the proportion of people claiming IB for mental health reasons. Following high-profile reports claiming that intervention would cost the State nothing, the Government has increased the availability of psychological therapies. The cost-neutrality claim relied on two statistics: the proportion of IB claimants diagnosed with mental and behavioural disorders; and estimates of the costs to the State of periods on IB. These are cross-sectional associations. We subject these two associations to more rigorous longitudinal analysis using nationally representative data from seventeen waves (1991-2007) of the British Household Panel Survey (BHPS). We model the effect of depression on (a) State transfers and (b) the probability of being on IB whilst controlling for covariates and unobservable heterogeneity. Our results reveal that cross-sectional associations with depression are substantially cnfounded. The estimated effects of becoming depressed on State transfers reduce by 83% and 88%, and on the probability of claiming IB drop to just 0.4 and 0.7 percentage points, for males and females respectively. We conclude that the stated benefits of reducing depression for the State and for labour market participation have been substantially over-estimated.
|Date of creation:||Aug 2010|
|Contact details of provider:|| Postal: HEDG/HERC, Department of Economics and Related Studies, University of York, York, YO10 5DD, United Kingdom|
Phone: (0)1904 323776
Web page: https://www.york.ac.uk/economics/postgrad/herc/hedg/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Paul Contoyannis & Andrew M. Jones & Nigel Rice, 2004.
"Simulation-based inference in dynamic panel probit models: An application to health,"
Springer, vol. 29(1), pages 49-77, January.
- Paul Contoyannis & Andrew M. Jones & Nigel Rice, 2002. "Simulation-based Inference in Dynamic Panel Probit Models: an Application to Health," Department of Economics Working Papers 2002-12, McMaster University.
- Katharina Hauck & Nigel Rice, 2004. "A longitudinal analysis of mental health mobility in Britain," Health Economics, John Wiley & Sons, Ltd., vol. 13(10), pages 981-1001.
- Faggio, Giulia & Nickell, Stephen, 2005. "Inactivity among prime age men in the UK," LSE Research Online Documents on Economics 19912, London School of Economics and Political Science, LSE Library.
- Giulia Faggio & Stephen Nickell, 2005. "Inactivity Among Prime Age Men in the UK," CEP Discussion Papers dp0673, Centre for Economic Performance, LSE.
- Duncan McVicar, 2006. "Why do disability benefit rolls vary between regions? A review of the evidence from the USA and the UK," Regional Studies, Taylor & Francis Journals, vol. 40(5), pages 519-533.
- Disney, Richard & Webb, Steven, 1991. "Why Are There So Many Long Term Sick in Britain?," Economic Journal, Royal Economic Society, vol. 101(405), pages 252-262, March.
- Stephen Fothergill, 2001. "The True Scale of the Regional Problem in the UK," Regional Studies, Taylor & Francis Journals, vol. 35(3), pages 241-246. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:yor:hectdg:10/21. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jane Rawlings)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.