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Mental health: the new frontier for labour economics

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  • Layard, Richard

Abstract

This lecture argues that mental health is a major factor of production. It is the biggest single influence on life satisfaction, with mental health eight years earlier a more powerful explanatory factor than current income. Mental health also affects earnings and educational success. But, most strikingly, it affects employment and physical health. In advanced countries mental health problems are the main illness of working age – amounting to 40% of all illness under 65. They account for over one third of disability and absenteeism in advanced countries. They can also cause or exacerbate physical illness. It is estimated that in the absence of mental illness, the costs of physical healthcare for chronic diseases would be one third lower. The good news is that cost-effective treatments for the most common mental illnesses now exist (both drugs and psychological therapy). But only a quarter of those who suffer are in treatment. Yet psychological therapy, such as cognitive behavioural therapy, if more widely available would pay for itself in savings on benefits and lost taxes. The lecture ends by illustrating how rational policy can be made using life-course models of wellbeing. Such policies should include a much greater role for the treatment and prevention of mental illness.

Suggested Citation

  • Layard, Richard, 2013. "Mental health: the new frontier for labour economics," LSE Research Online Documents on Economics 51551, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:51551
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    File URL: http://eprints.lse.ac.uk/51551/
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    References listed on IDEAS

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    1. Richard Layard & Andrew E. Clark & Francesca Cornaglia & Nattavudh Powdthavee & James Vernoit, 2014. "What Predicts a Successful Life? A Life‐course Model of Well‐being," Economic Journal, Royal Economic Society, vol. 124(580), pages 720-738, November.
    2. Lundborg, Petter & Nilsson, Anton & Rooth, Dan-Olof, 2011. "Early Life Health and Adult Earnings: Evidence from a Large Sample of Siblings and Twins," IZA Discussion Papers 5804, Institute for the Study of Labor (IZA).
    3. Almlund, Mathilde & Duckworth, Angela Lee & Heckman, James & Kautz, Tim, 2011. "Personality Psychology and Economics," Handbook of the Economics of Education, Elsevier.
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    Cited by:

    1. Irene Mosca & Alan Barrett, 2016. "The impact of adult child emigration on the mental health of older parents," Journal of Population Economics, Springer;European Society for Population Economics, vol. 29(3), pages 687-719, July.
    2. Egan, Mark & Daly, Michael & Delaney, Liam, 2015. "Childhood psychological distress and youth unemployment: Evidence from two British cohort studies," Social Science & Medicine, Elsevier, vol. 124(C), pages 11-17.
    3. Egan, Mark & Daly, Michael & Delaney, Liam, 2016. "Adolescent psychological distress, unemployment, and the Great Recession: Evidence from the National Longitudinal Study of Youth 1997," Social Science & Medicine, Elsevier, vol. 156(C), pages 98-105.
    4. Bubonya, Melisa & Cobb-Clark, Deborah A. & Wooden, Mark, 2014. "A Family Affair: Job Loss and the Mental Health of Spouses and Adolescents," IZA Discussion Papers 8588, Institute for the Study of Labor (IZA).
    5. repec:spr:izalbr:v:6:y:2017:i:1:d:10.1186_s40172-017-0056-1 is not listed on IDEAS
    6. Alan Piper, 2014. "Zukunftsangst! Fear of (and Hope for) the Future and Its Impact on Life Satisfaction," SOEPpapers on Multidisciplinary Panel Data Research 706, DIW Berlin, The German Socio-Economic Panel (SOEP).
    7. Melisa Bubonya & Deborah A. Cobb-Clark & David C. Ribar, 2017. "The Bilateral Relationship between Depressive Symptoms and Employment Status," Melbourne Institute Working Paper Series wp2017n10, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    8. Böckerman, Petri & Maczulskij, Terhi, 2016. "The Education-health Nexus: Fact and fiction," Social Science & Medicine, Elsevier, vol. 150(C), pages 112-116.
    9. Richard Dorsett & Cinzia Rienzo & Martin Weale, 2015. "Intergenerational and Inter-Ethnic Well-Being: An Analysis for the UK," National Institute of Economic and Social Research (NIESR) Discussion Papers 451, National Institute of Economic and Social Research.
    10. Noonan, Kelly & Corman, Hope & Reichman, Nancy E., 2016. "Effects of maternal depression on family food insecurity," Economics & Human Biology, Elsevier, vol. 22(C), pages 201-215.
    11. Klaus F. Zimmermann, 2016. "Health shocks and well-being," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 59(1), pages 155-164, March.
    12. Lelkes, Orsolya, 2014. "Boldog-boldogtalan - a közpolitika szerepe
      [Happiness and unhappiness. The role of public policies]
      ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(12), pages 1381-1396.
    13. Kelly Noonan & Hope Corman & Nancy E. Reichman, 2014. "Effects of Maternal Depression on Family Food Insecurity," NBER Working Papers 20113, National Bureau of Economic Research, Inc.

    More about this item

    JEL classification:

    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

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