ay Economic Causes of Mental Health and its Consequence on the American Economy
Kevin A Lannoch
Cleveland State University
Author Note
Kevin A. Lannoch, Undergraduate at Cleveland State University.
Majoring in Mathematics, Economics, and Communications
Abstract
In this paper, we will be exploring the socioeconomic factors that are related to mental illness and examining its effect on the economic characteristic of productivity. This paper will also explore the differing sides of whether it is the government and private firm’s responsibility to use economic resources in combatting mental illness in workers and citizens.
Keywords: mental illness, economics, depression, schizophrenia
Economic Causes of Mental Health and its Consequence on the American Economy
Mental illness is unlike physical ailments that occur in patients because it is something unseen, but its effect on quality of living can be substantial and devastating. In America approximately 43.8 million adults experience mental illness in a year, and it is estimated 21.4 percent of youth (age 13-18) experience a severe mental disorder during their life (NAMI, n.d). The most concerning statistic is that is that only 41% of adults with mental health conditions receive proper care, and for children (age 8-15) this number is only 50.6%(NAMI, n.d). These numbers show that not only is mental illness widespread in today’s society, but that also people do not receive the proper care. In this paper, we hope to discover the economic reasons behind mental illness, it’s effect on the economy in a macro and micro scale, and if, and how firms and government can create a society that helps these individuals.
Literature Review
Socioeconomic Factors
First, individual’s economic situation can create conducive environments for mental illness like schizophrenia, depression, and others to develop. According to Sacreno, Levav,& Kohn (2005) the social selection hypothesis has been proven true. This means someone in a low socioeconomic status is more likely to face schizophrenia or depression then someone in higher socioeconomic status. A person in low socioeconomic status is almost 1.8 times more likely to suffer from depression then a person in higher socioeconomic and over 32% diagnosed with non-affective diagnoses did not go for treatment for their schizophrenia (Sacreno, Levav, &Kohn,2005). Lower economic classes also are less likely to improve, as well as less likely to become employed than more affluent members who become inflicted by the same mental illness (Sacreno, Levav, &Kohn,2005). Another fact that inhibits recovery is as symptoms become increasingly seen, economic standing begins to decline further (Sacreno, Levav, &Kohn,2005). An economic side effect of mental illness that not only effects patients, but society as well, is a decrease in productivity.
Mental Health and Productivity
For a company to maximize their profits and have efficiency they must have their workers be as productive as possible. Anything that hampers this productivity ultimately is detrimental to the success of the firm. There is significant data that suggest mental illness hampers productivity. This is not just happening to one firm, but to a majority of the firms in the economy. . For example, Davlasheridze, Goetz & Han (2018) suggest that PHMD (Poor Mental Health day) is associated with a 1.84% lower per capita real income, which amasses to 53 billion dollars lost in the U.S.A during the years 2008-2014. On a global scale, mental illness will create 16 trillion dollars of loss profit over the next 20 years ( Davlasheridze, Goetz & Han, 2018). The direct and indirect costs of mental health are high in comparison to other health conditions. For example, depression ranks first and anxiety ranks fifth (Harvard Health,2010). These numbers show staggering amounts of loss of productivity and cost experienced because of mental health on the macroeconomic scale.
Harvard Health (2010) explained a study that shows this productivity loss on microeconomic scale. They studied multiple mental illness and found days’ loss due to that respective illness. The first mental order studied was depression. The study found that on average 18 days of productivity were lost, when workers had depression (Harvard Health,2010). For people with bipolarness, this number raised to 35 days of lost productivity (Harvard Health,2010). ADHD can effect workers as well, with 22 days lost of productivity (Harvard Health,2010). Additionally, a worker with ADHD are 2-4 times more likely to be fired (Harvard Health,2010). Lastly, the study found through an experiment that by treating at risk people for their mental issues, they were able to increase productivity by 2.6 hours per week. This generates 1,800 dollars for the firm yearly, and this only costed the firms between 100 and 400 dollars (Harvard Health,2010). Another study says that mental illness can reduce income 3,500 to 6,000 dollars per year, and that between 5 and 6 million US workers cannot find work due to a mental illness (Davlasheridze,Goetz& Han,2018).. This above data shows the impact of mental illness on individuals income and career prospect ,while also demonstrating how much firms lose in productivity.
Discussion
Use of Economic Resources by Private Firms and Government
Mental health is a legitimate concern for government and private firms. It has a debilitating effect on society and the individual. But why would government or private firms want to take actions to help treat and prevent mental illnesses? First, productivity decreases when workers suffer from mental health, additionally we know a large portion of the American population suffer from these illnesses. Also firms are looking to optimize their profits, and we have shown that this can decrease productivity. The government would want it’s economy being as efficient as possible. Secondly, having workers who work would decrease unemployment and increase the income of the nations. Workers with their greater income would increase consumption. These benefits would be achieved after overcoming multiple variables.
There are many obstacles that government and firms must overcome to create a society that limits the amount of mental illness. Sundararaman (2009) explains five issues that must be overcame for successful mental illness care. First, applying the many evidence based techniques of care on a practical level has been slow(Sundararaman,2009). Secondly, mental health is not accessible to all members of society, especially those in rural areas, but also for people of urban areas as well(Sundararaman,2009). Thirdly, the coverage of mental illness is less broad than that of physical illness. Fourthly, lack of coordination between providers creates gaps in patients overall care. Lastly, quantifying the quality of mental health care are not simply extensive enough to create lasting changes to the health care system(Sundararaman,2009). Other suggestions that can possibly help alleviate mental illness in low socioeconomic status is through the further implementation of family support programs, active labor market programs, controlling alchol prices and availability, and debt relief programs(WHO,2015)
Against the Further Use of Economic Resource by Private Firms and Government
Sundararaman (2009) explains how mental illness has always been difficult to manage due the lack of effective treatment. Mental illness was first treated with federal funds in 1963 and total expenditure was approximately 142 billion dollars in 2009(Sundararaman,2009).The United States Government and private firms realize the costliness of mental illness on society, and have put in extensive resource to combat it. The resources could be being used inefficiently, or the unique nature of the invisible mental illness and inability to see exactly what your treating can lead to disappointing results. This brings to question how exactly can quantify success against mental illness. Another is that it is it the American society that perpetuates mental illness through a variety of ways that now have become widespread and hard to fight. The ability to treat mental health would be a successful mission, however this would not stop the continue trend that has been seen-an increase in occurrences in society. This presents the question would government and firms be better off contributing resources elsewhere.
Conclusions and Future Study
There are multiple conclusions to take away from the economic data around mental health. First, mental health is correlated with socioeconomic factors. This means poorer members of society are more likely to suffer from mental illness and less likely to overcome such an obstacle. Secondly, mental health effects productivity adversely. This means lower incomes for those who suffer from mental illness like schizophrenia, depression, anxiety, and ADHD. Additionally, this means firms are not operating at an efficient level. In response to this government can provide subsidies and other vehicles to eliminate this deadweight loss so the economic output is maximized and individuals have the greatest propensity to earn income. This would include expanding to more technologically advanced techniques or just making mental health care facilities more accessible. However, others might argue that these tax dollars can be better utilized in other sectors of the economy. Further studies showing the true economic impact of not only on firms and their productions, but on the individual and the economic behaviors, would allow us a deeper understanding of a serious issue, and help unravel economic solutions that can create affordable, accessible, and acceptable means for mental illness.
References
Davlasheridze, M., Goetz, S. J., & Han, Y. (2018). The Effect of Mental Health on U.S. County Economic Growt. Retrieved November 4, 2018, from https://journal.srsa.org/ojs/index.php/RRS/article/view/900/869
Harvard Health Publishing. (2010, February). Mental health problems in the workplace. Retrieved November 4, 2018, from https://www.health.harvard.edu/newsletter_article/mental-health-problems-in-the-workplace
NAMI. (n.d.). Mental Health By The Numbers. Retrieved November 4, 2018, from https://www.nami.org/Learn-More/Mental-Health-By-the-Numbers
Saraceno, B., Levav, I., & Kohn, R. (2005, October).The Public Mental Health significance of research on socio-economic factors in schizopenia and major depression. Retrieved November 4, 2018, from https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1414773/
Sundararaman, R. (2009, April 21). The U.S Mental Health Delivery System Infrastructure:A primer. Retrieved November 4, 2018, from https://fas.org/sgp/crs/misc/R40536.pdf
WHO. (2011). Impact of Economic Crisese on Mental Health. Retrieved November 4, 2018, from http://www.euro.who.int/__data/assets/pdf_file/0008/134999/e94837.pdf
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