NB19-05: Changing Labor Markets and Mental Illness: Impacts on Work and Disability

The economy is evolving in a direction where the capabilities of people with the types of impairments that are created by mental illnesses may be in reduced demand in the labor market. These trends may be one explanation for the growth in disability claims by people with mental disorders, during a period when access to effective treatment was improving. Using national cross-sectional data, we plan to analyze recent changes in skills demand in the labor market and assess their effects on people with mental illnesses. Our proposed work will consist of several specific steps.
• We will analyze the National Household Survey on Drug Use and Health (NHSDUH) to examine changes in the occupational distribution of people with mental illnesses over the past 20 years.
• Using the work of Autor and Price (2013) and McKinsey (2017) among others, we will classify occupations according to their skill demands.
• Using the NHSDUH, we will examine the extent to which people with mental illnesses are differentially affected by changes in skills demand in the labor market. We will accomplish this by decomposing the effect of skills demand, local market conditions (state) and individual attributes on labor force participation, level of employment and disability program participation.