Poverty and severe psychiatric disorder in the U.S.: evidence from the Medical Expenditure Panel Survey

Previous studies have shown that persons with severe psychiatric disorders are more likely to be poor and face disparities in education and employment outcomes. Poverty rates, the standard measure of poverty, give no information on how far below the poverty line this group falls.

This paper compares the poverty rate, poverty depth (distance from the poverty line) and poverty severity (inequality of incomes below the poverty line) of households with and without a working-age member with severe psychiatric disorder in the United States using data from the 2007 Medical Expenditure Panel Survey (MEPS).

First, we perform multivariate analysis of the association between severe disorder and poverty depth using MEPS data. Second, we calculate poverty rates, depth, and severity for the subgroup of households having a member with disorder and compare to the subgroup of households without such a member.

In multivariate regressions, the presence of a household member with severe psychiatric disorder predicts a 52-percentage point increase in poverty depth and 3.10 times the odds of being poor. Poverty rate, depth, and severity are significantly greater for households of persons with disorder. Mean total incomes are lower for households of persons with severe disorder compared to other households while mean health expenditures are similar.

Severe psychiatric disorder is associated with greater depth of poverty and likelihood of being poor. We identify groups who are the most disadvantaged according to severity of income poverty among households with severe psychiatric disorder. These include households whose head has no high school education, who has been without work for the entire year, and who is black or Hispanic. While these characteristics are related to poverty for the overall sample, they correlate to heightened poverty severity when combined with severe disorder. Families face less severity than single persons but poverty rate, depth, and severity increase for both groups when combined with severe psychiatric disorder. Our study does not attempt to investigate the causes of poverty, focusing rather on improved poverty measurement.

We find that households of persons with disorder have a lower standard of living and face more severe forms of poverty. This may affect the health of their members through reduced access to health inputs, including access to health care.

This paper shows that there is a strong association between severe psychiatric disorder and poverty, and points to a need to break this association. Both mental health policy and income assistance programs should consider using poverty rate, depth and severity measures to evaluate the economic benefits of current programs and target future programs to those facing the most severe poverty.

The results point to the need for additional research in a number of areas: trends in poverty for households with severe psychiatric disorders over time; mobility and persistence of poverty for this group; and the association of severe disorder to other, non-monetary dimensions of poverty, such as a lack of social integration.