Exploring the Impact of Mental Health on Individual Outcomes: An Instrumental Variables Approach Using SHARE Data

The aim of this dissertation is to investigate the economic implications of mental health, focusing on its impact on labor market performance during the COVID-19 pandemic. Utilizing datasets such as SHARE and OxGRT, the study employs IV-Probit to address known endogeneity issues of mental health measures, using a sample of working older adults from 24 European countries (and Israel) during the pandemic, and novel instrumental variables related to the pandemic. Findings, consistent with the literature, indicate that poor mental health is significantly associated with reduced working hours. No association is found with increased working hours.