Recurrent major depression, employment and transitions to unemployment and disability benefits

This study assesses the effects of recurrent major depression on employment and transitions to unemployment and disability benefits. Examining this issue is essential for designing timely interventions aimed to sustain individuals’ employment. We rely on register data of a sample of individuals initially employed—a 2% sample of employees representative of French private-sector employees—followed up to eight years before and eight years after the year of diagnosis, aged between 20 and 60 years, over the period 2000–2015. We estimate that recurrent major depression persistently decreases the likelihood of being employed by 35 percentage points and annual earnings by 51%, and leads to increase the probability of long absence by 47 percentage points and the probability of permanent disability benefit recipiency by 33 percentage points. The effect sizes are similar between men and women. We find differences between age groups. For young and middle-aged individuals, recurrent major depression implies a decrease in employment rates, an increase in unemployment benefit rates and a persistent increase in disability benefit recipiency rates. Many young ill individuals remain attached to the labor market but experience unemployment and a large decline in annual earnings. For older individuals, recurrent major depression leads to a larger decrease in employment rates and a greater increase in disability benefit recipiency rates, compared to younger individuals. We conclude that differentiated policies tailored to age groups might be developed to support the employment of individuals with recurrent major depression. • Major depression is one of the most disabling diseases. • We estimate the effects of recurrent major depression on labor market outcomes. • Recurrent major depression decreases employment rates by 35 percentage points. • The effect sizes are similar between men and women. • We find important differences between age groups.