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Background: The study of self-reported mental health is a fairly
recent area for economists, although sociologists, psychologists and public
health specialists have been studying it for years. One methodological
problem with earlier research is that there are many unobserved characteristics
of individuals that may be correlated with self-reported mental health.
Neglecting these factors may lead to biased estimates of the effects of
variables such as income, education, health, etc. Panel data enables us
to control for unobserved individual specific effects, whereas a cross-section
study or time series study cannot.
Aims of the Study: This paper examines the determinants of self-reported
mental health in UK using data from the first eight waves of the British
Household Panel Survey. In particular, we are interested in assessing
the effect of education on self-reported mental health which other studies
have ignored.
Methods: The measure of self-reported mental health used in this
paper is the General Health Questionnaire (GHQ). To account for the possible
correlation between the unobserved individual effects and some explanatory
variables, a Hausman Taylor's instrumental variables estimator (HT) is
employed. In order to derive this estimator, one has to distinguish between
variables that are correlated with the individual specific effects (endogenous)
and variables which are uncorrelated with the individual specific effects
(exogenous). This HT estimator also allows for estimating the parameters
corresponding with time invariant variables such as education and ethnicity.
Results: The evidence presented here confirms that mental health
scores mentioned on the GHQ are significantly related to job status, age,
marital status and self-assessed health status. The results also show
no evidence that income impacts on self-reported mental health. Ethnicity
is also found to deteriorate self-reported mental health yet the effect
is not significant. The results of this paper also show that education
had no significant impact on self-reported mental health.
Implications for Mental Health Policy: Issues related to unemployment
and social cohesion may be relevant factors in the prevention of mental
illness. Policies aimed at improving these factors have an impact on the
mental health status of society. In consideration of the evidence of gender
differential in mental health, mental health policies should take into
account properly this issue.
Implications for Further Research: In order to draw definite conclusions,
it is important to formally test the presence of attrition bias as well
as expand the sample to include more waves. Still, we are concerned about
the issue of weak correlation between the instruments and potential endogenous
variables. Additionally, we have to bear in mind that inconsistent estimates
may potentially occur if the partition of the variables in subsets of
endogenous and exogenous is not correctly specified. These issues need
further research. The estimation technique also presented in this paper
may be applied to a wide range of health services research.
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