| Original language | English |
|---|---|
| Title of host publication | Oxford Research Encyclopedia of Economics and Finance |
| Publisher | Oxford University Press (OUP) |
| Publication status | Published - 2025 |
Abstract
We review the literature on Attention Deficit and Hyperactivity Disorder (ADHD), focusing on its long-term effects on educational and economic outcomes, the impact of pharmacological treatments, and the broader societal costs. We offer a critical review of the literature, which complements the numerous reviews in health sciences by (1) including studies from the economics literature employing quasi-experimental methods, (2) critically comparing the estimation strategies adopted in past studies, and (3) emphasising unresolved econometric challenges.
Our key findings are summarised as follows:
1. The quasi-experimental evidence based on sibling fixed effect estimation or genetic variation confirms that ADHD negatively impacts educational and economic outcomes. Notably, separating the effects of inattention and hyperactivity reveals that inattention drives adverse educational outcomes, while hyperactivity does not.
2. When evaluating the effect of medications on long-term outcomes, the lack of long-term random control trial studies requires addressing the challenge of non-random selection into ADHD treatment. A novel, promising estimation approach to address this selection issue is using pharmacoepidemiological studies that exploit administrative data and quasi-random variation in prescription rates across health providers. While this is possibly the most convincing estimation approach, it captures the causal effect of medications only for marginally treated patients who tend to be individuals with milder ADHD symptoms. The findings from these studies could be generalised to the full population only if there are no heterogeneous effects of the treatment and, in particular, if the effect of medications is identical across patients with different levels of symptoms. Adopting the marginal treatment effect framework is a potential methodological solution for future research.
3. Evidence indicates that children with milder ADHD symptoms are more likely to have a marginal diagnosis if they are the youngest in their school grade and if they live in countries or areas with higher rates of ADHD diagnoses. As a result, a cautious interpretation is required when comparing the estimated effects of pharmacological treatment across different countries or children with different propensity to be diagnosed.
4. The total economic burden of ADHD is substantial and multifaceted, extending beyond healthcare to include education costs, lost productivity, and justice system expenses, with significant spillover effects on families, peers, and society. Capturing all these costs is econometrically challenging and data-demanding, and there is a need for more robust empirical evidence and more findings for developing countries. Focusing on developed countries, recent studies estimate the annual per-person cost of ADHD at $244 to $18,751 (2019 constant dollars).
Our key findings are summarised as follows:
1. The quasi-experimental evidence based on sibling fixed effect estimation or genetic variation confirms that ADHD negatively impacts educational and economic outcomes. Notably, separating the effects of inattention and hyperactivity reveals that inattention drives adverse educational outcomes, while hyperactivity does not.
2. When evaluating the effect of medications on long-term outcomes, the lack of long-term random control trial studies requires addressing the challenge of non-random selection into ADHD treatment. A novel, promising estimation approach to address this selection issue is using pharmacoepidemiological studies that exploit administrative data and quasi-random variation in prescription rates across health providers. While this is possibly the most convincing estimation approach, it captures the causal effect of medications only for marginally treated patients who tend to be individuals with milder ADHD symptoms. The findings from these studies could be generalised to the full population only if there are no heterogeneous effects of the treatment and, in particular, if the effect of medications is identical across patients with different levels of symptoms. Adopting the marginal treatment effect framework is a potential methodological solution for future research.
3. Evidence indicates that children with milder ADHD symptoms are more likely to have a marginal diagnosis if they are the youngest in their school grade and if they live in countries or areas with higher rates of ADHD diagnoses. As a result, a cautious interpretation is required when comparing the estimated effects of pharmacological treatment across different countries or children with different propensity to be diagnosed.
4. The total economic burden of ADHD is substantial and multifaceted, extending beyond healthcare to include education costs, lost productivity, and justice system expenses, with significant spillover effects on families, peers, and society. Capturing all these costs is econometrically challenging and data-demanding, and there is a need for more robust empirical evidence and more findings for developing countries. Focusing on developed countries, recent studies estimate the annual per-person cost of ADHD at $244 to $18,751 (2019 constant dollars).