The impact of mental illness on the risk of employment termination

Mental illness can adversely impact labor market outcomes in a variety of ways, through education attainment, employment possibilities, and income. However, little is known about the impact of mental illness on an individual's ability to maintain employment.

This paper examines the impact of mental health on the risk of employment termination. We also distinguish between voluntary and involuntary employment termination.

Using data from the Medical Expenditure Panel Survey, we used survival analysis techniques to examine the impact of a mental illness diagnosis on the risk of employment termination and propensity score matching techniques to construct similar comparison groups. Initially, we used Cox proportional-hazards models where the event of interest was termination of employment. We then used a competing risk framework to differentiate between voluntary and involuntary employment termination. We also stratified our analysis by gender and capture levels of severity, receipt of treatment, and specific type of mental illness.

We found that individuals with mental illness have an increased risk of employment termination in general as well as both involuntary and voluntary job loss. These results were consistent across all regression specifications.

This paper is the first to explore the association between mental illness and the risk of employment termination in a sample of employed individuals. Employment is closely linked with mental health. Evidence suggests that employment can improve an individual's mental well-being but that job loss can have a detrimental effect. Our results suggest that individuals that can greatly benefit from their jobs are precisely those who are at high risk of losing them. IMPLICATIONS FOR HEALTH CARE PROVISION AND POLICIES: A greater effort must be made to provide support networks for employees within their work environments. IMPLICATIONS FOR HEALTH CARE RESEARCH: Future analysis should examine the impact of antidepressant therapy, supported employment policies, and other mental health-related interventions on the risk of employment termination for those individuals with mental illness. This would be instructive for advocates of the mentally ill to design more targeted interventions for individuals at risk. In addition, future research should examine the effect of other health conditions on the risk of employment termination. In the present study, poor self-reported health increased the risk of involuntary job termination. It would be informative to isolate what types of ailments contribute to this increased risk.