Mental illnesses, such as schizophrenia, affective disorders and personality disorders, are associated with heavy economic and non-economic burdens. This paper examines the relationship between socio-economic status in early childhood and the probability of developing schizophrenia, affective disorders and personality disorders. We use a sample of all Danish men born in 1981 and control for family factors one year before the birth of the child. The results show that men born in low-income families are more likely to be hospitalised with affective disorders. Men born in families where the father was not employed at the child's birth are more likely to be hospitalised with schizophrenia or personality disorder, than men born in families where the father was employed as wage-earner. In general, few people in the population have a severe mental illness and, consequently, the probability of developing a severe mental illness is low.
However, the relative differences in the predicted probability of developing a mental illness are large when we compare children who grew up families with average characteristics with children who grew up in families with low socio-economic status (ie: household income is low, parental education is basic, and parental occupational status is not employed).