Mental illness is one of the leading causes of mortality and morbidity worldwide and people

with severe mental illnesses tend to die of preventable conditions 25 years earlier than
persons without such diagnoses. Distressing symptoms can be exacerbated by the inability
to participate in work, leisure or age-appropriate responsibilities.  The substantial number of
people affected by mental illness worldwide (450 million) has profound socio-economic
implications for quality of life, health care systems, and the economic cost to society.

Since I decided my dissertation would focus on Mental illness and UK/US labour market
outcomes, I wanted to summarize here some of the main economic costs society faces
today. Growing research in behavioural economics and finance acknowledge the impact of
psychological mechanisms on economic behaviour, but there is still a strong need for mental
health to be incorporated into research studies, economic theories and methodologies. So,
we must work to conceptualizing mental illness in an intelligible way that captures and
delineates the empirical facts about the relationship between mental illness and economic
variables (i.e. productivity, growth and utility).

Many disorders begin in childhood/adolescence and have significant adverse effects on daily
functioning.  Although mental disorders are estimated to account for 13% of the global
burden of disease, the mental health budgets of the majority of countries constitute less
than 1% of their total health expenditures – a colossal treatment gap . Hence, expansion of
treatment would be cost-effective from occupational, economical and societal perspectives.

Labour Market
Previously, physical health was imperative for job performance, by cause of globalisation
and rises in the services sector; it is now mental health. Jobs have become innovation-
driven, knowledge intensive and psychologically more demanding. A higher level
of cognitive, social and emotional skills, are needed to keep up with the dynamic labour
market characterized by growing (perceived) job insecurity, job turnover, and more
frequent (spells of) unemployment. Thus, psychological wellbeing is of utmost importance.
On the other hand, a quality working environment is also vital for good mental
health. Work has a greater psychological impact on employees today as employment could
equip you with psychologically valuable elements i.e. intrinsic motivation, self-esteem,
possibilities for self-development and personal growth, and a sense of meaning or negative
psychological effects (i.e. work related stress, burnout, resulting MH problems like
depression, anxiety,psychosis..) and the enormous costs associated with them, in terms
of reduced productivity and human capital investment..increased absenteeism, work
disability and health care costs.

Direct Costs
 Cost of treatment
 Cost of medication
 Hospitals
 Prisons
 Impaired work performance
 In communities, some high income economies show that mental disorders
consume more than 20% of all health service expenditure.
 Cost of childcare
  Loss productivity by patient and/or family members

Indirect costs 
Mental health problems costs the EU an estimated 3-4% of GDP, mainly through lost
productivity. Those with depression experience symptoms that interfere with work ( i.e
an inability to concentrate, low energy and easy fatigability, exaggerated self-doubts,
indecisiveness and disturbed sleep).
Indirect labour costs include:
 Reduced productivity
 Increased absenteeism
 Work disability
 ‘Presenteeism’ (showing up at work while being not
productive/counterproductive)
 Effects on skill acquisition
 Reduced cognitive and social functioning

Especially in high-income countries, which are working to improve the quality and effective

use of human capital, the costs associated with mental health problems and the resulting
loss of functionality are vast and increasing.
Harvard Professor Ronald Kessler specializes in global mental health studies,
observes: “There is an entire burgeoning area of literature that looks at the impact of
medical conditions on role performance. Depression is one of the costliest conditions in the
workplace, and the majority of dollars for health care comes from employers. They are very
interested in knowing what they are getting for their dollar. Where once mental health was
likely to be the first thing cut, today a lot of forward-thinking employers are seeing the value
of high-quality mental health care”.

Conclusion
I love Economics and I love Psychiatry. This topic is salient, compelling, and personal to me.
Since childhood I always questioned economic issues and human psychology. The economy
is essentially run by us and by factoring in human behaviour into scientific theories, but also
aspiring to greatly improve the psychological well-being of the masses, then surely it would
lead to greater productivity and benefits for most.
It is clear mental health is highly significant to the economy, but also an important economic
asset to have. Mental illness disturbs mood, thought or functioning, which hinders a person
from leading a fulfilling or productive life. It tends to obstruct a person’s ability to study,
work, and to make decisions about educational, employment, housing, or other social
choices. Consequently, mental health disturbances not only impact the individuals who have
them, but hindrance to their families and increased economic costs to society at large.

76%-85% of people with severe mental disorders in low to middle income countries
receive no treatment. For high income countries 35-50% endure no treatment. Certain
populations live in a situation that makes them particularly vulnerable to developing mental
disorders and the social and economic impact of mental disorders.
Many resources are spent on preventing, treating and improving mental health.
Antidepressants have proliferated from a modest market in the 1980 to reaching sales
of $12 billion in 2008, plus the self-help market in the U.S was worth $10.82 billion in 2007.

Evidently, both the public and private sector should continue to spend on stress
management and treatment programs, but a continuous effort must be made by all
members of society to achieve national prosperity.