Discussion paper

DP16401 Career Effects of Mental Health

This paper investigates the career effects of mental health, focusing on depression,
schizophrenia, and bipolar disorder (BD). Individual-level registry data from Denmark show
that these disorders carry large earnings penalties, ranging from 34 percent for depression and
38 percent for BD to 74 percent for schizophrenia. To investigate the causal effects of mental
health on a person’s career, we exploit the approval of lithium as a maintenance treatment for
BD in 1976. Baseline estimates compare career outcomes for people with and without access
in their 20s, the typical age of onset for BD. These estimates show that access to treatment
eliminates one third of the earnings penalty associated with BD and greatly reduces the risks
of low or no earnings. Importantly, access to treatment closes more than half of the disability
risk associated with BD.


Biasi, B, M Dahl and P Moser (2021), ‘DP16401 Career Effects of Mental Health‘, CEPR Discussion Paper No. 16401. CEPR Press, Paris & London. https://cepr.org/publications/dp16401