Workers' Mental Health and Firm Performance: Evidence from firms' longitudinal data in Japan (Japanese)

Using firms' longitudinal data, this paper investigates the relationship among workers' mental health, firms' profit and productivity, and preventive measures at the workplace. In Japan, the number of workers suffering from mental disorders has grown significantly in this decade. From the advice given by the Japanese government, firms have introduced various preventive measures to cope with this problem. To our knowledge, however, there is almost no cost-and-benefit quantitative analysis when implementing such measures. Furthermore, there is also no evidence, besides numerous literature focusing on presenteeism and absenteeism, to assess to what extent firms' profit and productivity are affected when there are workers with mental disorders at the workplace. By using data from 451 Japanese firms with rich information related to mental health and firm performance, we found the following. First, we found that medium-sized firms (300-999 employees), the information technology industry, and firms with relatively longer average work hours tend to have a higher ratio of workers taking long-term sick leave due to mental disorders. Second, many firms seem to be reluctant to introduce costly measures, such as hiring occupational doctors or nurses and screening surveys. Third, we found that, in general, introducing firm-level measures does not decrease the ratio significantly. Fourth, firms with a higher ratio of such workers may decrease their profit-to-sales ratio compared to those with a lower ratio with more than a two-year lag. This implies that the ratio of workers taking long-term sick leave due to mental disorders may become a proxy of bad workplace management and also a leading indicator of a firm's future profit/loss situation.