A prescription for unemployment? Recessions and the demand for mental health drugs.

We estimate the relationship between mental health drug prescriptions and the level of labor market activity in the USA. Based on monthly data from the National Ambulatory Medical Care Survey of physicians and aggregated by US census regions, we find that the number of mental health drug prescriptions (those aimed at alleviating depression and anxiety) rises by about 10% when employment falls by 1% and when unemployment rises by 100 basis points, but only for patients in the Northeast region. This paper is one of the first to look at compensatory health behavior in response to the business cycle.