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Early Labor Market Origins of Long-Term Mental Health and its Intergenerational Correlation

Author

Listed:
  • Micole De Vera

    (CEMFI, Centro de Estudios Monetarios y Financieros)

  • Javier García-Brazales

    (Bocconi University and University of Exeter)

  • Jiayi Lin

    (Universitat Pompeu Fabra)

Abstract

What drives long-term mental health and its intergenerational correlation? Exploiting variation in unemployment rates upon labor market entry across Australian states and cohorts, we provide novel evidence of persistent effects on mental health two decades after labor market entry. We find that individuals exposed to a one percentage point higher unemployment rate at labor market entry relative to trend have 14% of a standard deviation worse mental health at ages 36–40. We further document an intergenerational impact of labor market entry conditions. Along the extensive margin, females more impacted by labor market entry conditions in terms of mental health increase completed fertility. Along the intensive margin, daughters whose parents experienced a one percentage point higher unemployment rate at entry have 18% of a standard deviation worse mental health during adolescence. Sons’ mental health is not impacted.

Suggested Citation

  • Micole De Vera & Javier García-Brazales & Jiayi Lin, 2022. "Early Labor Market Origins of Long-Term Mental Health and its Intergenerational Correlation," Working Papers wp2022_2208, CEMFI.
    • Handle: RePEc:cmf:wpaper:wp2022_2208
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    More about this item

    Keywords

    Recession; mental health; well-being; intergenerational correlation; Australia.;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

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