Economic Perspectives on Mental Health

The economic perspectives on mental health deals with the effects that it can have on individuals, families and society as a whole. It includes the costs of mental illness and the effects that it can have on other factors, such as education, poverty, violence, neglect, aggression and isolation.

Mental disorders represent a high cost for society and the health care system. However, it is possible to decrease the burden of mental disorders with cost-effective treatments.


Cost-effectiveness is an economic perspectives used to determine how effective a strategy or program is and whether it is worth the money spent. This is done by estimating the number of health units (such as depression-free days or a point on a clinical severity scale) that the strategy is expected to produce.

Mental illness is a significant and costly global burden, contributing to lost productivity at work, high unemployment rates and frequent sick days. These costs are primarily incurred by those who suffer from the condition and their families.

However, some things could be improved in evaluating cost-effectiveness. Firstly, this can be difficult because of the large proportion of the monetary cost of mental health problems that are not directly related to treatments for the disorder. This indirect cost can include lost labour supply, decreased work output due to absenteeism or presenteeism, and increased turnover or unemployment. These indirect costs may exceed direct treatment costs.


Mental health is an overall state of physical, emotional and social well-being. It is characterized by balance and emotional maturity, reasonable behavioural adjustment, relative freedom from anxiety and disabling symptoms, a capacity to establish constructive relationships and the ability to adapt and cope with adversity.

Mental illness is a significant economic perspectives burden on individuals, families, workplaces and the broader economy. This review highlights the need for further research on mental illness’s economic impact and cost.

Economic evaluation is essential to help policymakers understand how to use resources more efficiently. It also contributes to tackling the broader issues regarding financing mental health care, such as tax-funded universal healthcare provision, and can help inform mental health policies and practices.


Mental illness is a complex and challenging condition to diagnose, treat and manage. It impacts many outcomes beyond the immediate treatment setting and has significantly wider consequences for family life, education, employment and wealth generation.

These costs are often overlooked by mental health policymakers but considerably impact healthcare systems, employers and welfare budgets. It is essential that economic evaluations of interventions can reflect these broader impacts and that users of results take them into account when making decisions in this regard.

Cost-benefit analysis (CEA) is a valuable framework for comparing the health effects of different treatments in this context. It compares the monetary values of intervention effects against a generic ‘health outcome’ measure, such as life years gained or depression-free days achieved.

Economic impact

Mental health is a significant concern for individuals, their families, workplaces, society and the economy in general. It substantially costs the NHS, social care, employers and welfare budgets.

Mental illness imposes direct costs, such as diagnosis, treatment and medication, and indirect costs, such as lost labour supply. These costs are more significant for people with serious mental illness because of high rates of emergency room visits, comorbidity with physical illness and premature mortality.

Indirect costs include productivity loss, such as lost labour supply or public income support payments owing to an inability to work or reduced educational attainment. Moreover, people with severe mental illnesses will likely have lower employment rates than the population because they are less able to cope with stress or work demands.

There is a need for a more thorough economic evaluation of mental health interventions and programmes, enabling policymakers to make efficient allocation decisions with ‘opportunity costs in mind.