Career Effects of Mental Health

69 Pages Posted: 6 Jan 2015 Last revised: 21 Oct 2018

See all articles by Barbara Biasi

Barbara Biasi

Michael S. Dahl

Aarhus University - School of Business and Social Sciences

Petra Moser

NYU Stern Department of Economics; National Bureau of Economic Research (NBER)

Date Written: August 24, 2018


One in twelve Americans is affected by a mental health disorder. This paper examines the effects of such disorders and treatment, using individual-level registry data on mental health diagnoses. We find that mental health conditions carry immense earnings penalties: Compared with the population, people with depression earn 35 percent less, people with bipolar disorder earn 38 percent less, and people with schizophrenia earn a full 74 percent less. These results hold when we compare people with a disorder to their siblings, controlling for a person’s family background. People with mental health disorders also face substantially higher risks of zero earnings and disability. To investigate the causal effects of mental health, we examine the approval of lithium as a treatment for bipolar disorder (BD) in 1976. Baseline estimates compare career outcomes for people with and without access to treatment in their early 20s, the typical age of onset for BD. We find that access to treatment eliminates one third of the earnings penalty from BD. Moreover, it reduces the risk of zero earnings by more than one third, and it reduces the risk of disability by nearly two thirds. Notably, both the costs of mental health disorders and the benefits from treatments are concentrated in the bottom quantiles of earnings.

Keywords: Mental Health, Bipolar Disorder, Depression, Schizophrenia, Earnings, Entrepreneurshio, Disability

JEL Classification: M13, J23, J24, O31, I12

Suggested Citation

Biasi, Barbara and Dahl, Michael Slavensky and Moser, Petra, Career Effects of Mental Health (August 24, 2018). Available at SSRN: or

Michael Slavensky Dahl

Aarhus University - School of Business and Social Sciences ( email )

Department of Management
Bartholins Allé 10
Aarhus C, 8000

Petra Moser (Contact Author)

NYU Stern Department of Economics ( email )

44 West 4th Street
New York, NY 10003
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

No contact information is available for Barbara Biasi

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