Virginia Wilcox-Gök

Estimating the employment and earnings costs of mental illness: recent developments in the United States

Substantial attention has recently been focused on both the prevalence and consequences of mental illness. Generally, public interest in the costs of mental illness has been limited to the direct costs of treating the mentally ill. In this paper, we consider the magnitude and importance of a major component of the indirect costs of mental illness: employment and earnings losses. We first describe the technical difficulties involved in estimating these costs. We then describe new data and recent advances in the United States that have improved our ability to make such estimates. Our conclusions from the recent research are that each year in the United States 5-6 million workers between the ages of 16 and 54 lose, fail to seek, or cannot find employment as a consequence of mental illness. Among those who do work, we estimate that mental illness decreases annual income by an amount between

The Effects of Parents' Psychiatric Disorders on Children's High School Dropout.

3,500 and

Health Service Utilization and Insurance Coverage: A Multivariate Probit Analysis

6,000. We then discuss an emerging challenge to the traditional method for arriving at such estimates: the friction cost approach. We describe both the conceptual and technical differences between the friction cost method and the traditional human capital approach. We conclude that while economic context has much to do with whether one relies on human capital or friction cost estimates, each can offer useful information about labor market losses due to mental illness.

Do The Sick Retire Early? Chronic Illness, Asset Accumulation, and Early Retirement.

Abstract Mental illness is known to impose substantial direct costs on the ill. In this paper, we examine an indirect cost of mental illness. We investigate the effect of parents’ mental illnesses on the schooling of their children. Using data from the National Comorbidity Survey, we find that parents’ mental illnesses increase the probability of high school dropout of children, though these effects differ markedly with disease. We also find that parental mental illness has more consistently negative effects on girls than on boys. These findings indicate that parental mental illness can have a powerful impact on children’s schooling and subsequently on their adult lives. The larger impact on girls’ schooling compounds the greater earnings and employment losses due to mental illness borne by adult women. Our results suggest that policies designed to mitigate the effects of parental mental illness on children’s schooling attainment are potentially efficient uses of society’s resources.

Choice of health insurance by families of the mentally ill

Abstract A computationally practical form of probit analysis for multiple response variables was applied to data on health service utilization as it relates to type of supplemental insurance coverage and other demographic covariates in a sample of 4,658 individuals over age 65 on Medicare. The quantal response variables comprised use of five health services: Medical provider visit, hospital outpatient visit, emergency room visit, hospital inpatient stay, and home health care visit. An individual could use any or all of these services. Supplemental insurance coverage was categorized as Medicaid, employer-related private insurance, and privately purchased insurance, and any combination of these insurance coverages was possible. Covariates included health status, education, urban location, race, sex, marital status, employment status, age, and income. The multivariate probit model estimates association between insurance coverage variables and health service utilization patterns jointly for the five health se...

EARLY ONSET DEPRESSION AND HIGH SCHOOL DROPOUT

Our objective is to determine how chronic illness affects asset accumulation and retirement. Previous studies have found that poor health leads to early retirement, but those studies failed to look at the indirect impact of chronic illness on retirement. Using data from the Health and Retirement Study, we define an illness as chronic if the individual reports having asthma, cancer, heart disease, stroke or diabetes for four or more years. We first estimate how a chronic illness influences asset accumulation. We then estimate how asset accumulation and current poor health influence retirement. We observe that the vast majority of the chronically ill population do not report their general health to be poor nor do they report functional limitations in activities of daily living. Nevertheless, our results indicate that chronic illness leads these people to accumulate fewer assets during their working years and consequently retire later. Neither researchers nor policy-makers discussing the many critical issues surrounding illness and retirement have addressed this issue.

The effects of for-profit status and system membership on the financial performance of hospitals

This paper investigates whether choice of health insurance is influenced by the perceived mental and physical health of family members among a sample of policy-holders with private health insurance. A multinomial probit model of the choice among major medical coverage only, traditional full coverage, and coverage through a health maintenance organization is estimated. Results indicate that the presence of at least one family member who rates his or her general health as poor does not affect the policy-holders choice of health insurance. However, the presence of at least one family member considered at risk of mental illness does in some instances affect the policy-holders choice of health insurance: We observe significant effects for policy-holders who are female, black, have some college education, work for a large firm, and live in an urban area. These findings suggest that adverse selection may arise when individuals are able to choose between health insurance policies with different degrees of coverage for mental health care and that such effects are far more pronounced for those people who consider themselves at risk for mental illness than physical illness.

Economic consequences for other family members of mental health problems in older people

Mental illness, in its various forms, is common in the United States. Tens of millions of Americans are afflicted by an episode of mental illness every year. Estimates of the 12-month prevalence of mental disorders in the U.S. (including alcohol and substance abuse or dependence) indicate that 22–30 persons per 100 in the adult population are afflicted each year.1 An episode of a psychiatric disorder, like a physical disorder, is debilitating – often disrupting the ability of the afflicted to carry on normal personal, social, and work activities. Mental illness also commonly results in large medical expenses. In addition, a number of recent papers have found that mental illness imposes large labor market losses on the ill, decreasing the likelihood of employment and limiting earnings for the employed.2 In particular, research by two of the authors indicates that depressive disorders cause significant reductions in the labor force participation of women and the earnings of both men and women.3

Prevalence and Patterns of Major Depressive Disorder in the United States Labor Force

This research examines whether for-profit status or system membership is significantly related to the financial performance of hospitals. Panel data containing 573 observations of Florida hospitals for 1984 through 1987 are used in a fixed-effects regression model. The results indicate that it is system membership rather than forprofit status that is significantly related to better financial performance. For-profit status is unrelated to overall financial performance. System hospitals have higher revenues per admission, but not higher expenditures per admission than independent hospitals. The findings are consistent with the hypothesis that expanding hospital systems target locations and services that are potentially profitable.

The labor market effects of mental illness The case of affective disorders

Objectives We estimated the effects of poor mental health among older family members on the labour supply and incomes of younger family members living in the same household. Due to policy differences, effects for Scotland were compared with other parts of the UK. Methods Effects were estimated using the British Household Panel Survey (waves 1999-2006), with data from621 older respondents and 800 younger family members. Mental health was assessed using the General Health Questionnaire (GHQ), together with self-reported presence of depression, anxiety, orothermental health problems. Results The associations between labour supply and mental ill-health were found to vary by gender and region of the UK. For men, there were larger negative effects in Scotland relative to the rest of the UK. For women, mental ill-health was associated with increased labour supply in Scotland, while in the remainder of the UK, a negative association was observed. Income losses accrued across all groups except among Scottish females, with the largest significant negative effects observed among men living in the remainder of the UK. Conclusions Mental health problems among older family members are associated with significant labour market effects for younger family members. To reduce the economic consequences, better assessment of mental health among older people may be warranted. Further employment support for younger family members, in the form of more flexible work policies, might also serve to ameliorate economic losses.