The labor market consequences of family illness

Abstract

BACKGROUND: This study examines the impact of mental illness on the labor market performance of family members of afflicted individuals. Numerous research projects have attempted to measure the impact of mental illness and related disorders on the ill individual, yet have traditionally neglected estimating potential costs accruing to family members of the ill. AIMS OF THE STUDY: Previous research estimating the impact of illness on the time allocation decisions of family caregivers has been limited in scope. I obtain estimates of the impact of mental illness on the probability of labor force participation and hours of work of all family members. The general analysis used in this study will pave the way for more accurate assessments of the costs of all types of illness and the estimates obtained will provide policy makers with a much more complete picture of the costs of mental illness. METHODS: The main empirical work in this study includes a probit estimation of labor force participation and a tobit regression of hours worked (including sample selection correction). The data sample, taken from the 1987 National Medical Expenditure Survey, is also partitioned by gender to clarify effects of family illness on labor supply for both females and males. RESULTS: Adult males are found to increase their probability of labor force participation in the presence of mental illness in the family (all else equal) when the mental illness is accompanied by a chronic physical illness. However, females are surprisingly found to have no significant impact on their probability of being a member of the labor market when a family member is afflicted with mental illness. On the other hand, hours of work are significantly reduced for both females and males when the mentally ill family member is afflicted with additional illnesses (physical and/or mental). DISCUSSION: Previous studies have traditionally not considered the effects of family illness on males because females are typically found to be the primary caregiver when a family member falls ill. The findings in this study indicate that men suffer reductions in their hours of work in an equivalent magnitude to females. Thus, males should not be ignored when estimating the opportunity costs of illness in families. IMPLICATIONS FOR HEALTH POLICIES: Current federal and state policies provide for some of the medical costs and replace some of the lost income of ill individuals, but generally do not support family members who are negatively affected by illness. This research provides evidence supporting the arguments of advocates for policy to ameliorate the financial burden borne by family members of the ill. IMPLICATIONS FOR FUTURE RESEARCH: The estimates obtained in this study show that women and men both need to be studied when determining the effects of family illness on labor supply, and should be studied separately to obtain clear results. Also, future research should include examining particular mental illnesses to see whether there is a higher cost of one over the other (e.g., schizophrenia versus major depression), as this may provide valuable information to policy makers. In addition, comparison of the costs of psychological disorders to chronic physical illnesses (such as cancer and heart disease) should be undertaken.