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Rising autism prevalence: Real or displacing other mental disorders? Evidence from demand for auxiliary healthcare workers in California

Economic Inquiry. August 25, 2014

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Autism is a development disorder that has increased in prevalence from 0.5 to 14.7 per 1,000 children over 1970–2010. Using annual wages and provider counts from the American Community Survey and information from 21 regional development centers in California, we estimate the labor demand for auxiliary health providers. We focus on this subset of providers because, unlike physicians and psychologists who can diagnose autism, these workers cannot induce their own demand. If the incidence of autism is increasing independently of other mental disorders, then the demand for auxiliary health providers should increase, leading to higher wages and labor supply. Otherwise, the increase in autism diagnosis is merely displacing other mental disorders. We find that a 100% increase in autism cases increases the wages of auxiliary health workers over non‐autism health occupations by 8–11% and the number of providers by 9–14%. Furthermore, we find that one of every three new autism diagnoses is merely supplanting mental retardation diagnoses, but does not displace other mental disorders. These estimates suggest that at least part of the increase in autism diagnoses, about 50–65%, reflects an increase in the true prevalence of the disorder.