Labor Market Outcomes of Persons with Mental Disorders
- Presenter:
Chair: Randall Ellis; Discussant: Richard Scheffler Mon June 5, 2006 10:45-12:15 Room 225
Background: Mental disorders are common and associated with high costs and substantial levels of work disability. The poor labor market outcomes of persons with mental disorders are surely attributed, in part, to the association between mental disorders and deficits in higher-order social and cognitive skills that are important determinants of workplace productivity, yet pervasive stigma against mental illness may also play a role. This is the first study to apply the analytical tools economists have used to study other disadvantaged groups in the labor market specifically to persons with mental disorders, a group subject to some of the most intense stigma and poorest outcomes. Objectives: We use data from the 1999 Medical Expenditure Panel Survey to analyze employment outcomes among persons with mental disorders. The objectives are to compare the mean wages and employment rates of persons with and without mental disorders; and estimate the extent to which the poor outcomes for persons with mental disorders may be attributed to stigma.
Methods: We decompose wage and employment differentials between workers with and without mental disorders into an explained component, attributed to differences in the average productivity of the two groups, and an unexplained component, some part of which may be attributed to the effects of stigma against mental illness. The decompositions are based on wage and employment functions estimated separately for persons with and without mental disorders. Key explanatory variables include workers’ demographic and human capital characteristics, non-wage incomes, job characteristics, and functional limitations (physical/cognitive/social). We provide estimates of productivity-adjusted employment and wage differentials for persons with mental disorders overall, and for subgroups of persons with mood, anxiety, adjustment, or psychotic disorders.
Results: Employment rates are 85% for persons with no disorder vs. 70% for persons with mental disorders. The differential is explained, in part, by differences in health status, non-wage incomes, and gender, but approximately 20% remains unexplained. Among the employed, mean hourly wages are $14.85 for persons with no disorder vs. $14.09 for persons with mental disorders. About 70% of the wage differential is explained by differences in functional limitations, gender, part-time employment, and health insurance coverage. The remaining 30% is unexplained. The results reveal distinctly different patterns of labor market outcomes across the subgroups, consistent with a severity gradient of mental disorders such that persons with adjustment disorders experience the most favorable outcomes, while persons with psychotic disorders experience the least favorable. Implications: The project is timely because of the employment mandates of the ADA, and because recent advances in medications for serious mental disorders enable many persons with these illnesses to function at a level where they are able to work. The results identify productivity-related characteristics that contribute to the low wages and employment rates of persons with mental disorders, but also suggest that stigma may play an important role. By helping to identify barriers that impede success in the labor market, the results have important implications for mental health services directed toward improving employment outcomes among persons with mental disorders.
