Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/80545 
Year of Publication: 
2013
Series/Report no.: 
IZA Discussion Papers No. 7451
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
Do episodes of mental health problems cause future mental health problems, and if yes, how strong are these dynamics? We quantify the degree of persistence in mental health problems using nationally-representative, longitudinal data from Australia and system GMM-IV and correlated random effects approaches are applied to separate true from spurious state dependence. Our results suggest only a moderate degree of persistence in mental health problems when assuming that persistence is constant across the mental health distribution once individual-specific heterogeneity is accounted for. However, individuals who fell once below a threshold that indicates an episode of depression are up to five times more likely to experience such a low score again a year later, indicating a strong element of state dependence in depression. Low income is a strong risk factor in state dependence for both men and women, which has important policy implications.
Subjects: 
mental health
depression and anxiety
dynamic panel data models
GMM-IV
HILDA
JEL: 
I14
C23
Document Type: 
Working Paper

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