A hidden recession? Mental illness costs the US a staggering $282B annually, new study shows

The research, published in April as a working paper by the nonprofit National Bureau of Economic Research, reveals the estimate is equivalent to a typical recession, or 1.7% of the nation’s gross domestic product. The price of $ 282 billion is also more than 30% more than the costs estimated in the previous studies of the epidemic, which the researchers noted focused on the cost of treatment and the loss of income due to mental illness.

“In this paper, we present the first integrated model of macroeconomics and mental health building on classical and modern psychological theories,” co-author Aleh Tsyvinski, PhD, professor in the Department of Economics at Yale, he said in a news release. “We show that mental illness changes the way people spend, the money they save, their financial choices, as well as the country’s labor supply, and that creates huge annual costs to our economy. .”

People with mental illness may eat less, choose less demanding jobs, and avoid investing in risky assets like housing or stocks, Tsyvinski said. His team’s data showed people with mild or severe mental illness used 3-7% less goods and services and worked 13-23% less than healthy people.

“We wanted to gain a better understanding of mental illness and measure its economic costs,” assistant professor Job Boerma, PhD, assistant professor in the Department of Economics at UW-Madison, said in a release of news. “Mental illness is something that 20 percent of the population experiences at any given time. The fact that the cost of mental illness amounts to a whopping 1.7% of total spending for the US population —very large.

Increased mental health care will boost the economy

Boerma and Tsyvinski, along with Boaz Abramson, PhD, an assistant professor in the Department of Finance at Columbia Business School, applied their research to three policy proposals supported by the Biden administration:

As of April 1, more than 122 million Americans lived in mental health professional shortage areas, according to the KFF health plan. In these areas, only 27% of mental health care needs. Eliminating this deficit would not only reduce mental illness by 3.1% but also have social benefits equal to 1.1% of total spending, or $118 billion, the study found.

Providing care for everyone aged 16-25 with a mental illness would be even better, resulting in an estimated 1.7% gain in overall spending.

However, researchers have found that reducing the cost of mental health care may result in less economic impact. The problem, according to Boerma, is that many people with mental illness do not seek treatment, either because of a lack of available services, the stigma associated with mental illness, or the belief that treatment will not work. work. Cheap services will not be able to overcome problems.

“If you don’t factor in those other factors, lowering the cost of care by itself won’t increase people’s propensity to seek treatment,” Boerma said.

Next, Boerma plans to alert lawmakers to his team’s findings, saying in a UW-Madison news release that he hopes the continued integration of economic and psychology research will strengthen policymaking. while policies are supported by science.

“The most interesting explanations always come at the end or between different departments,” Boerma said. “It will be good for the field if we can do this more.”

If you need immediate mental health support, get in touch 988 Suicide and Life Problems.

To find out more about mental health:

Subscribe to Well Adjusted, our newsletter with simple strategies for working smarter and living better, from the Fortune Well team. Register free today.