The Effects of Poor Mental Health on the Labor Market Outcomes of Women Eligible for Assistance from the Temporary Assistance for Needy Families (TANF) Block Grant

Abstract

Abstract Context: The recent reauthorization of TANF until 2010 will likely continue the focus on work-first strategies for moving welfare recipients off of the rolls, but many TANF recipients face barriers making work-first an impractical strategy. Mental illness is one of the obstacles faced by many low-income women eligible for TANF. Prior research indicates that poor mental health can substantially impact labor market outcomes. Little research has examined the impact of mental illness on the TANF target population, low-income, unmarried women with children. Objective: To examine the impact of mental illness on the labor market outcomes of low-income, unmarried, women with children. Design, Setting, and Participants: This study analyzes data from the 2003 National Survey on Drug Use and Health for 1817 low-income, unmarried, women with children. The analyses controlled for a diagnosis of serious mental illness, a proxy for poor mental illness, a self-report of overall health status, and interactions between mental and overall health. The empirical model also controlled for confounding variables such as substance abuse problems, age, education, urbanicity, and race. Main Outcome Measures: Two dependent variables were analyzed: employment and weekly hours of work. The dichotomous measure of employment is equal to one if the individual was employed at the time of survey. The measure of weekly hours is left- censored at zero for those who are unemployed. Results: Low-income, unmarried women with children with fair to poor health and a diagnosis of serious mental illness were 79% less likely to be employed than individuals with no mental illness and excellent health (p<0.01) and worked 27.6 fewer hours per week than women with no mental illness and excellent health. Conclusions: The findings demonstrate the importance of examining the interactions between mental health and physical health. Mental illness coupled with fair or poor overall health drastically impacts labor market outcomes for the TANF eligible population. The findings suggest that the Department of Health and Human Services and state administrators should take into account the effects of mental illness when designing work-first programs and TANF regulations.