Mental illness isn’t just a pervasive problem in the U.S.—one in five adults experience it each year, per the nonprofit National Alliance on Mental Illness —it’s also an expensive one, costing the economy $282 billion annually.
This, according to a new study by economists at Yale and Columbia universities and the University of Wisconsin-Madison. The research, published in April as a working paper by the nonpartisan National Bureau of Economic Research , reveals the estimate is equivalent to an average economic recession, or 1.7% of the nation’s aggregate consumption .
The $282 billion price tag is also 30% more than costs estimated in previous epidemiological studies, which researchers noted focused on the cost of treatment and income loss due to mental illness . “In this paper, we develop the first integrated model of macroeconomics and mental health building on classic and modern psychiatric theories,” coauthor Aleh Tsyvinski, PhD , a professor in the Yale Department of Economics , said in a news release . “We show that mental illness alters people’s consumption, savings, portfolio choices, as well as the country’s labor supply, generating enormous annual costs to our economy.
” People with mental illness may consume less, opt for less-demanding jobs, and avoid investing in risky assets such as a house or stocks, Tsyvinski said. His team’s data showed people experiencing mild or severe mental illness consumed 3–7% fewer goods and services and worked.
