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  5. Mental Health Care and Its Impacts
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Mental Health Care and Its Impacts

Paper Session

Saturday, Jan. 3, 2026 8:00 AM - 10:00 AM (EST)

Philadelphia Convention Center
Hosted By: American Economic Association
  • Chairs:
    Valentin Bolotnyy, Stanford University
  • Natalia Emanuel, Federal Reserve Bank of New York

A Danger to Self and Others: Involuntary Hospitalization's Health and Criminal Consequences

Natalia Emanuel
,
Federal Reserve Bank of New York
Valentin Bolotnyy
,
Stanford University
Pim Welle
,
Allegheny County Department of Human Services

Abstract

The involuntary hospitalization of people experiencing a mental health crisis is a widespread practice, as common in the US as incarceration in state and federal prisons and 2.4 times as common as death from cancer. The intent of involuntary hospitalization is to prevent individuals from harming themselves or others through incapacitation, stabilization and medical treatment over a short period of time. Does involuntary hospitalization achieve its goals? We leverage quasi-random assignment of the evaluating physician and administrative data from Allegheny County, Pennsylvania to estimate the causal effects of involuntary hospitalization on harm to self (proxied by death by suicide or overdose) and harm to others (proxied by violent crime charges). For individuals whom some physicians would hospitalize but others would not, we find that hospitalization nearly doubles the probability of being charged with a violent crime and more than doubles the probability of dying by suicide or overdose in the three months after evaluation. We provide evidence of housing and earnings disruptions as potential mechanisms. Our results suggest that on the margin, the system we study is not achieving the intended effects of the policy.

Housing First or Treatment First? Evidence from the VA's Homelessness Programs

Sydney Costantini
,
University of California-Berkeley

Abstract

Debates in homelessness policy often pit “housing first” and “treatment first” style interventions against one another. In the former model, permanent, highly subsidized housing is given unconditionally and immediately. In the latter model, unhoused individuals are offered short-term combined housing and treatment programs, known as transitional housing, where issues like substance use are addressed. Using a national sample of nearly 300,000 unhoused, mentally ill veterans, I find that “housing first” reduces three-year mortality by 4.6 percentage points. In contrast, “treatment first” has no long-term effects on health.

The Effect of Depression on Income: Evidence from Colombia

Kaveh Danesh
,
University of California-Berkeley and University of California-San Francisco
Arlen Guarin
,
World Bank
Christian Posso
,
Banco de la República de Colombia

Abstract

Depression affects an estimated 10% of individuals worldwide and may have negative impacts on economic activity. We use nationwide administrative data from Colombia to estimate the causal impact of depression on earnings using a difference-in-differences approach that leverages cross-individual variation in the timing of major depressive episodes. Among young, formally employed workers, depressive episodes reduce earnings by 8.2%, an effect that persists for up to 24 months and is primarily mediated by the extensive margin. To further support a causal relationship between depression and earnings, we use propensity score matching to compare labor market outcomes for individuals with depression who plausibly vary only in their access to specialty care. Relative to individuals who do not access such care, those who do experience an increase in earnings which compensates for most of the income loss due to depression.
JEL Classifications
  • I1 - Health