The financial situation before and after first-time psychiatric in-patient diagnosis of schizophrenia spectrum, bipolar, and major depressive disorder

Abstract

Schizophrenia spectrum, bipolar, and major depressive disorders are severe mental illnesses (SMIs) that not only entail great suffering for those affected but also major societal costs. In this study, I use administrative register data to provide a detailed picture of the financial situation of people with SMI in Sweden during a period of ±10 years around first-time psychiatric in-patient diagnosis of schizophrenia spectrum, bipolar, and major depressive disorders. Receiving a diagnosis was associated with a considerable drop in earnings, which was largely compensated for by social transfers: mainly sickness and disability insurance. However, there were also large and increasing pre-diagnosis earnings gaps, relative to matched comparison groups, especially among those with schizophrenia spectrum disorders. These gaps were to a lesser extent compensated for by social transfers. Consequently, there were permanent and increasing – due to lost earnings growth – income differentials. Hence, findings in previous studies are confirmed: even in an advanced welfare state, people with SMI – especially those with schizophrenia – have an extremely weak position on the labour market and an equally difficult financial situation.