Psychiatric disorders and labor market outcomes: evidence from the National Latino and Asian American Study

Abstract

This paper investigates to what extent psychiatric disorders and mental distress affect labor market outcomes in two rapidly growing populations that have not been studied to date-ethnic minorities of Latino and Asian descent, most of whom are immigrants. Using data from the National Latino and Asian American Study (NLAAS), we examine the labor market effects of meeting diagnostic criteria for any psychiatric disorder in the past 12 months as well as the effects of psychiatric distress in the past year. The labor market outcomes analyzed are current employment status, the number of weeks worked in the past year among those who are employed, and having at least one work absence in the past month among those who are employed. Among Latinos, psychiatric disorders and mental distress are associated with detrimental effects on employment and absenteeism, similar to effects found in previous analyses of mostly white, American born populations. Among Asians, we find more mixed evidence that psychiatric disorders and mental distress detract from labor market outcomes. Our findings suggest that reducing disparities and expanding access to effective treatment may have significant labor market benefits-not just for majority populations, as has been demonstrated, but also for Asians and Latinos.

Identifying the Mechanisms for Workplace Burden of Psychiatric Illness

“…In this way, we go beyond the main thrust of previous research, which merely indicates particular categories of mental disorders, such as depression, that were associated with worse labor market outcomes, but it is not clear which symptoms were relatively more detrimental. 11,14,15 Our focus on symptoms, rather than on binary indicators for diagnostic categories, is also consistent with the decreasing emphasis on such categories by clinicians, researchers, and policymakers. 29,30 For example, using a multinomial probit model, Slade & Salkever 31 estimated the effects of specific symptoms of schizophrenia that are most important in the choice of not working for pay, employment in a nonsupported job, and employment in supported/sheltered jobs.…”

“…[7][8][9][10] More broadly, studies based on nationally representative datasets show that psychiatric disorders are associated with unemployment, absenteeism, reduced productivity, and reduced labor supply. [11][12][13][14][15][16] One limitation is that in many prior studies, psychiatric illness is measured as a binary variable, which is set equal to 1 if an individual meets the diagnostic criteria for disorder, and is set equal to 0 otherwise (see Chatterji et al 14,15 for examples). This approach considers individuals who do not meet criteria for clinical diagnosis to be healthy, ignoring the fact that individuals not meeting diagnostic criteria could still have significant psychiatric impairment adversely affecting their labor market outcomes.…”

The Contribution of Economists to Understanding Racial Health Disparities in the US

“…Papers by Chatterji and Okunade in this volume add to the short list of papers that document the impact of racial health disparities on economic outcome (Bastida and Pagan 2002;Chatterji et al 2007;Currie 2005), adding mental health's impact on labor market outcomes and obesity impact on on-time high school graduation.…”

Heterogeneity and the effect of mental health parity mandates on the labor market

“…Mental illness is associated with a significant reduction in the labor market performance of individuals with mental illness (Bartel and Taubman, 1979, 1986; Chatterji et al, 2011, 2007; Ettner et al, 1997; Frank and Gertler, 1991). Although treatment is effective at improving productivity on the job (Berndt et al, 1998), it is unclear if mentally ill workers receive these productivity gains as higher wages.…”

“…Subsequent research, using instrumental variable models of psychiatric distress in the National Comorbidity Survey (Ettner et al, 1997), has found smaller adverse associations between poor mental health and labor market outcomes, implying that poor mental health is associated with 10-30% lower earnings than peers in good mental health. Chatterji et al (2011, 2007) use data from the National Latino and Asian American Study and the National Comorbidity Survey–Replication to estimate the adverse consequences of a diagnosed mental illness and mental distress. Their estimates indicate that a diagnosed psychiatric disorder reduces the probability of employment by 5-20 percentage points, but they find no evidence that mental illness or distress affects wages or hours worked.…”