The Effect of Adolescent Mental Health on Young Adulthood Labor Market Decisions and Outcomes (2013)

Undergraduate: Paige Andrews

Faculty Advisor: Stephen Lich-Tyler
Department: Economics

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Mental health of adolescents has recently received growing attention because of its rising prevalence and the discovery of its predictive capabilities for mental health status later in life. Most existing economic mental health studies have examined adulthood and found that depression hinders labor productivity and increases the probability of unemployment. This paper examines the impact of depression during adolescence on labor market decisions and outcomes during young adulthood using Wave I and III of the National Longitudinal Study of Adolescent Health. The initial stage of analysis uses a multinomial logistic regression to predict the likelihood of being employed, seeking further education, or not participating in the labor market during early adulthood based on a lagged determinate of depression from adolescence. The second stage of analysis delves further into education and employment by examining the type of enrolled degree and wage rate using a multinomial logistic regression and ordinary least squares estimation, respectively. This analysis was repeated for sibling pairs to attempt to control for unobserved environmental and genetic predictors of labor market decisions and outcomes. Depression was found to be a significant predictor of non-participation in the labor force relative to employment for the entire sample and sibling pairs but was not found to significantly predict wage, educational enrollment or type of educational degree for either sample.