title: The effect of mental health on employment: evidence from Australian panel data.
abstract: To what extent does poor mental health affect employment outcomes? Answering this question involves multiple technical difficulties: two-way causality between health and work, unobservable confounding factors and measurement error in survey measures of mental health. We attempt to overcome these difficulties by combining 10 waves of high-quality panel data with an instrumental variable model that allows for individual-level fixed effects. We focus on the extensive margin of employment, and we find evidence that a one-standard-deviation decline in mental health reduces employment by 30 percentage points. Further investigations suggest that this effect is predominantly a supply rather than a demand-side response and is larger for older than young workers.
authors: Department of Economics, University of Queensland, Brisbane, Queensland, Australia.
authors: Paul
authors: P
authors: Frijters
authors: David W
authors: DW
authors: Johnston
authors: Michael A
authors: MA
authors: Shields
mesh_terms: D000328:Adult; D000367:Age Factors; D001315:Australia / Q000453:epidemiology; D004522:Educational Status; D004651:Employment / Q000523:psychology* / Q000706:statistics & numerical data; D005260:Female; D006801:Humans; D008297:Male; D001523:Mental Disorders / Q000453:epidemiology / Q000523:psychology*; D008603:Mental Health / Q000706:statistics & numerical data; D008875:Middle Aged; D055815:Young Adult
keywords: employment; fixed effects; instrumental variables; mental health; panel data