Document Type
Discussion Paper
Publication Date
5-2026
CFDP Number
2528
CFDP Pages
100
Journal of Economic Literature (JEL) Code(s)
D31, I12, I18, J13, J24
Abstract
We develop a quantitative macroeconomic theory of child mental health. The theory is grounded in child psychiatry, formalized in a life-cycle heterogeneous agent model of child development, and disciplined using micro data on mental health of children and parents. Intergenerational transmission of mental illness arises due to both biological factors and parental behavior. Parents experiencing mental illness have negative expectations and lose time due to rumination. As a result, they invest less in their child’s mental health. We use the model to evaluate policies designed to improve child mental health. We show that subsidizing mental health treatment for children generates sizable welfare gains.
Recommended Citation
Abramson, Boaz; Boerma, Job; Daruich, Diego; and Tsyvinski, Aleh, "The Macroeconomics of Intergenerational Mental Health Dynamics" (2026). Cowles Foundation Discussion Papers. 2950.
https://elischolar.library.yale.edu/cowles-discussion-paper-series/2950