Mental Illness and Unhappiness

By:	Layard, Richard (London School of Economics) Chisholm, Dan (World Health Organization) Patel, Vikram (London School of Hygiene and Tropical Medicine) Saxena, Shekhar (World Health Organization)
URL:	http://d.repec.org/n?u=RePEc:iza:izadps:dp7620&r=ltv
This paper is a contribution to the second World Happiness Report. It makes five main points. 1. Mental health is the biggest single predictor of life-satisfaction. This is so in the UK, Germany and Australia even if mental health is included with a six-year lag. It explains more of the variance of life-satisfaction in the population of a country than physical health does, and much more than unemployment and income do. Income explains 1% of the variance of life-satisfaction or less. 2. Much the most common forms of mental illness are depression and anxiety disorders. Rigorously defined, these affect about 10% of all the world’s population – and prevalence is similar in rich and poor countries. 3. Depression and anxiety are more common during working age than in later life. They account for a high proportion of disability and impose major economic costs and financial losses to governments worldwide. 4. Yet even in rich countries, under a third of people with diagnosable mental illness are in treatment. 5. Cost-effective treatments exist, with recovery rates of 50% or more. In rich countries treatment is likely to have no net cost to the Exchequer due to savings on welfare benefits and lost taxes. But even in poor countries a reasonable level of coverage could be obtained at a cost of under $2 per head of population per year.
Keywords:	mental illness, welfare benefits, healthcare costs, life-satisfaction
JEL:	I10 I14 I18