Career Effects of Mental Health

Abstract

Case studies of successful entrepreneurs who are bipolar suggest a positive link between bipolar disorder and entrepreneurship. To investigate this link, we examine detailed individual-level registry data for Denmark, including medical prescriptions, for 2.4 million individuals. These data show that individuals who are at a higher risk of bipolar disorder are more likely to be self-employed and more likely to be incorporated. They are also more likely to become an executive in a young and small firm albeit not in other firms. Most strikingly, bipolar individuals earn 43 percent less on average and are 16 percent more likely to earn zero wages. But they are also 13 percent more likely to enter the 90th percentile of the wage distribution. To examine the potential effects of mental health treatments on wages, we exploit the introduction of lithium in Denmark in 1976. Comparisons of wage differences for cohorts who had access to lithium when they were 20 with cohorts who did not have access indicate that access to lithium eliminated the wage penalty for individuals who are at risk of bipolar disorder. In addition, their chances of entering the 90th percentile of the wage distribution increased by 6 percent.

Keywords: Mental health, creativity, entrepreneurship, innovation, wages, pharmaceuticals

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