2011-11-03

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MENTAL HEALTH,

WELLBEING AND

EMPLOYMENT

RICHARD LAYARD

CENTRE FOR ECONOMIC PERFORMANCE, LONDON SCHOOL OF ECONOMICS

www.cep.ac.uk/layard

OECD-IZA Seminar, Paris, 3-4 November 2011

MENTAL HEALTH

Effects on employment and

productivity.

Cost-effective treatments exist;

not used.

Promotion: at school and at work.

The wellbeing perspective.

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EFFECTS: EMPLOYMENT RATES

Rate for mentally ill relative to others (%)

Severe disorder (worst 5%)

Moderate disorder (next 15%)

UK 65 82

9 other OECD countries (av) 66 87

Implications : UK employment is reduced by 4.4%

: inequality is increased

: bigger factor than low qualifications

Source: OECD (2011) p41 (16-64)

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EFFECTS: DISABILITY BENEFITS

Numbers on disability benefits as % of W.A. Pop.

Due to mental illness

All causes

UK 2.5 6.1

US 2.0 6.6

6 other OECD countries (av) 2.4 6.4

• Share of mental health in new claims is increasing

• Av spell duration for mental illness in UK is 4 years

Source: OECD (2011) p117

2011-11-03

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Degree of disability in each age group

(Numbers per 1,000)

Source: WHO (2002). Western Europe

0

10

20

30

40

50

60

70

0-14 15-29 30-44 45-59 60+

mental health

physical health

EFFECTS: ABSENTEEISM

% of days absent

Disorder No disorder

UK 8.0 2.5

21 European countries

11.2 5.0

Sources: UK: Sainsbury Centre for Mental Health (2007); OECD (2011) p64

Implications : average hours reduced by 1.1%.

in UK : nearly half of all absence.

: borne proximally by employers.

: also „presenteeism‟ (= 2x absenteeism ?)

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EFFECTS: EARNINGS

Sweden log earnings

= .10 Non-cognitive skill at 18 (standardised)

+ .11 Cognitive skill at 18 (standardised)

+ etc

UK (all variables standardised) Earnings at age 34

= .06 Emotional problems at age 5

+ .11 Vocab. at age 5

+ etc

Sources: Lundborg et al (2011); British Cohort Study.

TREATABILITY: PREVALENCE

Adults %

Schizophrenia 0.5

Depression 8.5

Anxiety Disorders 8.5

Dementia 1.5

TOTAL 19

Source: ONS: Psychiatric Morbidity Survey, 2007;

Mental health of children and young people, 2004.

Children (5-16) %

Emotional disorders 4

Conduct disorder/ADHD 6

TOTAL 10

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TREATABILITY: CBT FOR ADULT

ANXIETY/DEPRESSION Cost of therapy = £750 (10 sessions)

Cost of 1 month on benefit = £750

Cost is recovered if those treated spend on average

1 month less on benefit

e.g. if 4% spend 25 months less.

FINDING

Net change on benefits = 5%

Also saving on other healthcare probably exceeds

cost of treatment.

Sources: Layard et al (2007); Gyani et al (2011); Chiles et al (1999).

TREATABILITY: THE IAPT PROG.

(Improved Access to Psychological Therapy)

AIM: Treat 2% of pop. p.a.

Requires 40 therapists per 250,000 pop.

= in England 8000 therapists (by 2013)

Includes 1 employment support worker for

every 8 therapists.

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TREATABILITY: PARENT TRAINING

FOR CHILD CONDUCT DISORDER

Cost £1,200 per child

2/3 improve

Average improvement = .5 SDs

Savings to public sector (discounted)

= £3,300 (mainly health care, criminal

justice, and special education)

Source: Knapp, McDaid and Parsonage (2011). 6 other programmes with

negative net public cost.

UNDERTREATMENT

% of mentally ill people in any form of treatment

% of total % of people on

disability benefits

ADULTS

UK

US

EUROPE

25

28

25

50

46

CHILDREN

UK

25

Sources: UK: ONS Surveys.

US: OECD (2011) p87.

EUROPE: Lepine et al (1997).

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PROMOTION: AT SCHOOL

180 programmes (typically 18 hours in groups of 15)

Average S.R. effects of a programme

= + 11 percentile points on achievement

+ 9 ″ ″ behaviour

+ 9 ″ ″ emotional state

Example Penn Resilience Programme

Cost £150

Source: Payton et al (2008); Challen et al (2011).

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PROMOTION: AT WORK In 17/19 countries work-related mental problems up.

1. BETTER MANAGEMENT

Workers are least happy when?

2. BETTER JOB DESIGN

• Meaning and information

• Autonomy

• Competence/fit

3. HANDLING ABSENCE

• Proactive

• Openness about mental illness

• Work adjustment

• Getting treatment

Source: OECD Employment Outlook (2008) p222.

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THE WELLBEING APPROACH

Thomas Jefferson: “The care of human life and

happiness is the only legitimate object of good

government”.

GfK NOP POLL (Britain, 2005)

“A government‟s prime objective should be achieving the greatest happiness of the people, not the greatest wealth”

Agreed 81%

Disagreed 13%

Don‟t know 6%

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Now more feasible due to the science of

happiness.

Moreover valuing benefits by willingness-to-

pay makes no sense for many policy outcomes

e.g. health, social care, crime, community

cohesion, local environment, redistribution.

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THE FUTURE OF POLICY ANALYSIS

Let Wit be well-being of person i at time t.

Maximand is ∑ (∑ Wit ).

Government chooses policies to maximise this,

subject to all constraints, including

Wit = f (Circumstancesit, Genesi, Backgroundi, Life-coursei)

i t

WELLBEING AND INCOME OVER TIME

Source: Layard et al (2010).

2011-11-03

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“O.K., if you can‟t see your way to giving me a

pay raise, how about giving Parkerson a pay cut?”

WELLBEING AND EMPLOYMENT

World Values Survey. (46 countries, 4 years, 90,000 people –

not panel)

Happinessit = f ( - 6 Unemployedi

- 6 Divorced/Separated/Widowedit

+ 6 log Yit

- 30 Unemployment ratet )

Source: Helliwell (2003). Similar to di Tella et al (2001).

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WELLBEING, INCOME AND MENTAL

HEALTH : CROSS-SECTION (UK)

Dependent variable: Life-Satisfaction at age 34

(1) (2) (3) (4) (5)

Independent

variables:

Income .11 .10 .11 .06 .06

Malaise

(reversed)

.03

(at 5)

.06

(at 10)

.12

(at 16)

.25

(at 26)

.31

(at 30)

Controls

Source: British Cohort Study. All variables standardised (coefficient s.e.s

about .01)

Aim for individuals and governments:

to create more happiness in the world

and (especially) less misery

actionforhappiness.org

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Challen, A., Machin, S., Noden , P. and West, A. (2011), Evaluation of the UK Resilience Programme, Final Report (for

the Department for Education), Research Report DFE-RR097.

Chiles, J., Lambert, M., and Hatch, A. (1999), “The Impact of Psychological Interventions on Medical Cost Offset: A

Meta-analytic Review”, Clinical Psychology: Science and Practice, 6(2).

Di Tella, R., MacCulloch, R. and Oswald, A. (2001), “Preferences over inflation and unemployment: Evidence from

surveys of happiness,” American Economic Review, 91:335–41.

Gyani, A., Shafran, R., Layard, R. and Clark, D. (2011) Enhancing Recovery Rates in IAPT Services: Lessons from

analysis of the Year One data. Available on IAPT website.

Helliwell, J. (2003), “How‟s life? Combining individual and national variables to explain subjective well-being,”

Economic Modelling, 20, 331–60.

Knapp, M., McDaid, D. and Parsonage, M (eds) (2011), “Mental Health Promotion and Mental Illness Prevention:

The Economic Case”, Department of Health.

Layard, R., Clark, D., Knapp, M. and Mayraz, G. (2007), “Cost-benefit analysis of psychological therapy”, National

Institute Economic Review, No 202.

Layard, R., Mayraz, G. and Nickell, S. (2010), “Does Relative Income Matter? Are the Critics Right?” in E. Diener, J.

F. Helliwell, D. Kahneman (eds), International Differences in Well-Being, New York: Oxford University Press.

Lepine, J., Gastpar, M., Mendlewicz, J. and Tylee, A. (1997), “Depression in the community: the first pan-European

study DEPRES (Depression Research in European Society)”, International Clinical Psychopharmacology, 12:19-

29.

Lundborg, P., Nilsson, A. and Rooth, D-O. (2011), “Early Life Health and Adult Earnings: Evidence from a Large

Sample of Siblings and Twins”, IZA DP No 5804.

REFERENCES

OECD (2011), Mental Health and Work: Evidence, Challenges and Policy Directions.

Payton, J. W., Weissberg, R. P., Durlak, J. A., Dymnicki, A. B., Taylor, R. D., Schellinger, K. B. and Pachan, M. (2008),

The Positive Impact of Social and Emotional Learning for Kindergarten to Eighth-Grade Students: Findings from

Three Scientific Reviews, Chicago, Illinois: Collaborative for Academic, Social and Emotional Learning (CASEL).

Sainsbury Centre for Mental Health (2007), “Mental Health at Work: Developing the business case”, Policy Paper 8.

WHO (2002), Reducing Risks, Promoting Healthy Life.