The effect of area-level waiting times for psychological therapies on individual-level labour market outcomes

The association between common mental health conditions, including anxiety and depression, and labour outcomes has been extensively documented. However, the consequences of delaying access to therapies addressing these conditions is unknown. The NHS Talking Therapies programme was launched in England in 2008 and had expanded to reach 1.24 million users by 2021. We investigate the reduced-form impact of delayed access to this programme on the gap in probability of employment and taking time away from work attributable to poor mental health. We measure mental health and labour outcomes using 2015-2019 data from the UK Household Longitudinal Study. As this does not record use of Talking Therapies, we use poor mental health to proxy capacity to benefit and identify the intent-to-treat effect. A one standard deviation (10.5 days) decrease in median area-level waiting time leads to a 1.5 percentage point decrease in the gap in probability of employment between individuals in good and poor mental health. Similarly, the gap in the probability of taking time away from work decreases by around 1 percentage point. Our findings are robust to alternative model specifications, sample definitions, treatment definitions, and dealing with potential selective attrition. Our reduced form estimates suggest that faster access to effective treatment can improve labour market outcomes and reduce the productivity losses associated with mental health problems.