Exploring Mental Health: The Journey Across Life Cycle and Time

Abstract

This paper documents the evolution of mental health over the life cycle and the last twenty years in the United States. We focus on depression and use data from the Panel Study of Income Dynamics (PSID) and the Health and Retirement Study (HRS). We document a U-shape of depression incidence over the life cycle with an inflection point around retirement age. Using a regression analysis, we document large disparities by income, wealth, sex, race, marital status, and the presence of children over the life cycle. We find that the rich, males, married individuals, whites, and individuals with children have a lower expected depression incidence than their counterparts. Over time, we find strong fluctuations corresponding to major events such as The Great Recession and the COVID-19 pandemic. Interestingly, while the average level of depression incidence has been usually stable, we document that the differences in mental health across individual characteristics have not been reduced in the last 20 years. To investigate the inflection point around retirement further, we use an event study design to study the impact of retirement on mental health. We find that retirement increases depression incidence by 5% at the time of retirement and that this effect reaches 11% six years later

Christian Velasquez

Ph.D. Candidate

My research interests include Macroeconomics of Climate Change, International finance, and Small Open Economies.