Thursday 3 February 2011

Economic Effect of Depression-Related Early Retirement


The economic effects of depression and other mental disorders receive limited research attention. One pathway for depression to influence economic status is through early retirement as well as lower rates of employment during the working years.  The effects of early retirement are the focus of a recent Australian study by Schofield et al published in the British Journal of Psychiatry.

This study examined adults between the ages of 45 and 64 participating a large survey of the economic impact of ill health.  Survey respondents who reported they were out of work and attributed their work status as due to depression were the primary case group.  An additional group of respondents who were not working due to another mental disorder (schizophrenia, anxiety disoders, dementia, ADHD or other mental disorder) made up the other mental disorder group.

Based on results from a sub-sample, the authors estimated that Australia has approximately 25,000 older individuals in early retirement or unemployed due to depression and approximately 39,000 in early retirement or unemployed due to another mental disorder.

The key findings from the economic analysis were (depressed group data followed by other mental disorder group in parenthesis)

  • Accumulated any wealth: 9% (3%) compared to rates of those employed and not ill
  • Among those with any wealth, median wealth: 213,000 (112, 315) compared to control median 255,199 (figures in Australian dollars--multiply by .66 for U.S. dollars)
  • Home equity: 75% (56%) compared to 89% of those employed and not ill
  • Meets requirements for Australian pension (superannuation): 31% (23%) compared to 93% of those employed and not ill
The findings underscore the significant impact of depression and other mental disorders on wages and accumulation of wealth.  These disorders are commonly chronic in nature reducing income through out the adult life cycle.  Very few middle to older age individuals not working due to depression or other mental illness have any significant life savings.

The authors summarize the implications of their study with the following points:
Because of the limited personal resources for those with depression and other mental disorders as they age, the state will face a significant burden in aiding these individuals
The study supports early identification and treatment as a potential method to reduce the economic effects of depression and other mental illnesses

Photo of male cardinal courtesy of Yates Photography


Schofield DJ, Shrestha RN, Percival R, Kelly SJ, Passey ME, & Callander EJ (2011). Quantifying the effect of early retirement on the wealth of individuals with depression or other mental illness. The British journal of psychiatry : the journal of mental science, 198, 123-8 PMID: 21282782

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