Objectives: We estimated the effects of poor mental health among older family members on the labour supply and incomes of younger family members living in the same household. Due to policy differences, effects for Scotland were compared with other parts of the UK.
Methods: Effects were estimated using the British Household Panel Survey (waves 1999-2006), with data from 621 older respondents and 800 younger family members. Mental health was assessed using the General Health Questionnaire (GHQ), together with self-reported presence of depression, anxiety, or other mental health problems.
Results: The associations between labour supply and mental ill-health were found to vary by gender and region of the UK. For men, there were larger negative effects in Scotland relative to the rest of the UK. For women, mental ill-health was associated with increased labour supply in Scotland, while in the remainder of the UK, a negative association was observed. Income losses accrued across all groups except among Scottish females, with the largest significant negative effects observed among men living in the remainder of the UK.
Conclusions: Mental health problems among older family members are associated with significant labour market effects for younger family members. To reduce the economic consequences, better assessment of mental health among older people may be warranted. Further employment support for younger family members, in the form of more flexible work policies, might also serve to ameliorate economic losses.