Economic Burden of Poor Mental Health

In today’s economy, workers across all sectors are seeking steady, gainful employment. Likewise, employers are seeking productive, consistent workers. For individuals with mental illness, this may be an impossible job description to fill. A recent report published by the Organization for Economic Cooperation and Development (OECD) claims that common mental health conditions lead to decreased workplace productivity and substantial economic losses.

The OECD is an organization of approximately three dozen developed nations that seeks to improve the economic and social well-being of people around the world. The OECD recommends policies and business practices to address long-term challenges in worldwide productivity, innovation, and economic growth. In its latest report, the OECD addresses the substantial economic burden of mental illness around the world. According to data compiled from multiple sources, the OECD reports that, at any point in time, 20% of the population suffers from a mental illness and these conditions negatively affect workplace productivity. Primarily, people with mental illness are more likely than healthier coworkers to be absent from work, and each absence is longer for those with mental illness. Additionally, even when workers with mental illness are present at work, they struggle to be highly productive.

The total monetary cost associated with mental health is hundreds of billions of dollars annually in developed countries. Yet, most of these dollars are not spent in the health care sector. Most of the costs are incurred through a lost labor supply, high unemployment rates, frequent sick days, and lost productivity at work.  In the European Union (EU), the total cost of mental health is estimated to be 800 billion euros annually, which accounts for 3% to 4% of the gross domestic product of the EU. In Canada, the monetary cost of decreased productivity associated with poor mental health is more than $15 billion, one-third of the total cost associated with mental illness.

The overall employment rate for people with mental illness is 10% to 15% lower than people without mental illness; people with mental illness are two to three times more likely to be unemployed. In the United States alone, workers with mental health disorders are 50% more likely to experience involuntary job loss and 30% more likely to leave a job voluntarily than healthier counterparts.

Women, young adults, and individuals with low levels of education are the most likely to experience mental illness. Most mental health disorders are mild to moderate, with depression, anxiety, and substance use disorders being the most common conditions. However, many mental health conditions coexist with physical comorbidities, which also negatively affect productivity.

The occurrence of mental illness among young adults is particularly worrisome, according to the OECD report, since young adults are at increased risk for leaving the job market completely or never entering it at all. In OECD member nations, mental illness accounts for one-third to one-half of new disability claims for workers. Among young adults, the proportion is 70%.

Luckily, research also indicates that individuals with mental illness who receive treatment can increase productivity and performance in the workplace. However, more than half of the people who suffer from mental illness receive no treatment — a social and policy-based struggle around the world that has already gained attention in recent years.

Many factors influence how mental health affects workplace performance, including psychological demands of the job itself, job security (or insecurity), and family and social support. According to the OECD, interventions to improve the economic burden of mental health should focus on improved working conditions and support for non-work-related stress. Additionally, the OECD recommends an atmosphere of mental health prevention, rather than reacting to acute episodes of poor mental health. Prevention and early identification of mental illness will improve the chances of young adults entering the workforce and maintaining long-term employment.

The misconceptions and stigma associated with mental illness at work prevent sufferers from disclosing their condition and receiving proper treatment. Particularly in the current economy, workers are even less likely to reveal anything that would make them appear to be a less-than-ideal employee. But, also in this economy, employers would be wise to take care of their employees and ensure productivity and quality job performance by keeping workers secure, happy and (mentally) healthy.


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OECD. Sick on the job? Myths and realities about mental health at work. 2011.

Image via kwest / Shutterstock.

Jennifer Gibson, PharmD

Jennifer Gibson, PharmD, is a practicing clinical pharmacist and medical writer/editor with experience in researching and preparing scientific publications, developing public relations materials, creating educational resources and presentations, and editing technical manuscripts. She is the owner of Excalibur Scientific, LLC.
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