BACKGROUND: The Organisation for Economic Cooperation and Development reports that one in every two people experiences a mental illness in their lifetime, and developed policy guidelines to address the impact of mental health-related issues on employment and health. The results of this policy initiative have been reported in many member countries but no survey findings are available yet for Japan. Previous studies in Japan focused on the social costs of mental illness, but little empirical evidence exists on burdens created by mental illness in individual households. AIMS: This study investigated the effects of mental illness and mental distress on family members' employment and sleep time. Employed men and women family members and unemployed women family members who wanted to work were included in the study. METHODS: Japanese survey data from the 2013 Comprehensive Survey of Living Conditions were analyzed to identify the above-mentioned effects. A propensity score matching method was used to create a valid comparison group for family members of patients with mental illness and distress. RESULTS: For depression, family member average weekly work hours decreased by a range of 1.06 (p%lt;0.01) to 1.18 (p<0.01) for men, and 0.53 (p<0.1) to 1.06 (p<0.05) for women. For dementia (termed "major neurocognitive disorder" in the DSM-5), there were no statistically significant effects on work hours in men, but the work hours of employed women increased, ranging from 1.15 (p<0.05) to 1.25 (p<0.01). Mental illness in a family member also significantly influenced future employment prospects of unemployed women. In family members of patients with dementia, sleep time decreased by a range of 3.6 minutes (p<0.05) to 4.8 minutes (p<0.01) per night for men and 12 minutes (p<0.01) per night for women. DISCUSSION AND LIMITATIONS: These findings can add to the existing evidence on the effects of mental illness and distress on family members' work hours and sleep time in Japan, which are consistent with research from other countries such as Germany, the UK, and the US. This study has two limitations. First, the magnitude of the effect of mental illness is limited with respect to the illness category in our study, since the severity of the condition and the impact on actual daily life may vary across categories or differ even within the same category. Second, measurement error might exist in the self-reported mental illness measures. POLICY IMPLICATIONS: First, cooperation and mutual support between employers and the community are necessary to support working family caregivers by allowing them to adjust work schedules to accommodate caregiving responsibilities. Second, social institutional policies are needed that reduce the burden of informal caregiving for family members with mental illness and increase access to long-term care for those in need. Third, since mental illness and distress have been shown to affect family members' sleep schedules, health care programs must focus on promoting caregivers' general health. IMPLICATIONS FOR FUTURE RESEARCH: To further address the burden of mental illness and distress on family members, future research should examine illness severity as measured by Activities of Daily Living.