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).
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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.