Changing Labor Markets and Mental Illness: Impacts on Work and Disability
Richard Frank, Sherry Glied, Keith Marple, Morgan Sheilds

This paper analyzes trends in labor force participation (LFP) and disability benefit application among people with mental illnesses. It also explores differences in the skill requirements of jobs held by people with mental illnesses, as compared with the general population. The study is based on data from the National Health Interview Survey (NHIS) for the years 1997-2017 and the O*NET survey of jobs. The findings suggest a clear gradient in labor force participation by severity of psychological distress. In 1997-99, women with severe psychological distress were only 61% as likely to participate in the labor force as women who reported no symptoms. Men with severe psychological distress were only 54% as likely to participate in the labor force. The recession disproportionately affected people with mental illnesses. Between 1997-1999 and 2006-2008, the period of the recession, LFP among women declined by roughly 3% for those with mild illnesses, but by 18% for those with severe illnesses. Among men, LFP fell by 8% for those with mild illnesses and by 18% for those with severe illnesses. The overall reduction in LFP for the population was notably affected by an increase in the prevalence of mental health problems in the U.S. SSDI participation has increased over time for all levels of psychological distress. The occupations with the highest concentration of people with a mental health condition are office workers, sales, production, management, construction and food preparation; and several of these occupations (office, sales and construction) experienced markedly declining shares of the labor force over the 20 years of observation.

This research was supported by a grant from the U.S. Social Security Administration (SSA) as part of the Retirement and Disability Research Consortium (RDRC). We are also grateful to the Robert Wood Johnson Foundation for financial support. The findings and conclusions are solely those of the authors and do not represent the views of SSA, any agency of the federal government, or the NBER Retirement and Disability Research Center.