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The Short‐Term Effect of Depressive Symptoms on Labor Market Outcomes

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  • Lizhong Peng
  • Chad D. Meyerhoefer
  • Samuel H. Zuvekas

Abstract

We estimated the short‐term effects of symptoms 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 exhibiting depressive symptoms reduces the likelihood of employment. We did not, however, find evidence of a causal relationship between depressive symptoms and hourly wages or weekly hours worked. Our estimates are substantially smaller than those from previous studies and imply that depressive symptoms reduce the contemporaneous probability of employment by 2.4 percentage points. In addition, we examined the effect of depression on work impairment and found that exhibiting depressive symptoms increases annual work loss days by about 1.4 days (33%), which implies that the annual aggregate productivity loses because of depression‐induced absenteeism range from $900m to $1.9bn in 2009 USD. Copyright © 2015 John Wiley & Sons, Ltd.

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  • Lizhong Peng & Chad D. Meyerhoefer & Samuel H. Zuvekas, 2016. "The Short‐Term Effect of Depressive Symptoms on Labor Market Outcomes," Health Economics, John Wiley & Sons, Ltd., vol. 25(10), pages 1223-1238, October.
    • Handle: RePEc:wly:hlthec:v:25:y:2016:i:10:p:1223-1238
    DOI: 10.1002/hec.3224
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    3. 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).
    4. Dackehag, Margareta & Ellegård, Lina Maria & Gerdtham, Ulf-G & Nilsson, Therese, 2018. "Social Assistance and Mental Health: Evidence from Longitudinal Data on Pharmaceutical Consumption," Working Papers 2018:2, Lund University, Department of Economics.
    5. Björn Nilsson, 2017. "Parental depressive symptoms and the child labor-schooling nexus: evidence from Mexico," Working Papers DT/2017/06, DIAL (Développement, Institutions et Mondialisation).
    6. Strulik, Holger, 2019. "An economic theory of depression and its impact on health behavior and longevity," Journal of Economic Behavior & Organization, Elsevier, vol. 158(C), pages 269-287.
    7. 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.
    8. Bryan, M.; & Roberts, J.; & Sechel, C.;, 2019. "The Effect of Mental Health on Employment:Accounting for Selection Bias," Health, Econometrics and Data Group (HEDG) Working Papers 19/14, HEDG, c/o Department of Economics, University of York.
    9. Lefgren, Lars J. & Stoddard, Olga B. & Stovall, John E., 2021. "Rationalizing self-defeating behaviors: Theory and evidence," Journal of Health Economics, Elsevier, vol. 76(C).
    10. Alloush, M., 2018. "Income, Psychological Well-being, and the Dynamics of Poverty: Evidence from South Africa," 2018 Annual Meeting, August 5-7, Washington, D.C. 274223, Agricultural and Applied Economics Association.
    11. Ringdal, Charlotte & Rootjes, Frank, 2022. "Depression and labor supply: Evidence from the Netherlands," Economics & Human Biology, Elsevier, vol. 45(C).
    12. 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.
    13. Osmani, Ahmad Reshad & Okunade, Albert A., 2019. "Cancer survivors in the labor market: Evidence from recent US micro-panel data," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 80, pages 202-221.
    14. Shen, Zheng & Fang, Xiangming & Zheng, Xiaodong, 2022. "The impact of women's off-farm employment on depressive symptoms: Evidence from rural China," Social Science & Medicine, Elsevier, vol. 311(C).
    15. Böckerman, Petri & Bryson, Alex & Viinikainen, Jutta & Hakulinen, Christian & Pulkki-Råback, Laura & Raitakari, Olli & Pehkonen, Jaakko, 2017. "Biomarkers and long-term labour market outcomes: The case of creatine," Journal of Economic Behavior & Organization, Elsevier, vol. 142(C), pages 259-274.
    16. 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.
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    19. 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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    More about this item

    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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