The personal and national costs of mental health conditions: impacts on income, taxes, government support payments due to lost labour force participation

Schofield, Deborah J., Shrestha, Rupendra N., Percival, Richard, Passey, Megan E., Callander, Emily J., and Kelly, Simon J. (2011) The personal and national costs of mental health conditions: impacts on income, taxes, government support payments due to lost labour force participation. BMC Psychiatry, 11 (72). pp. 1-7.

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Abstract

Background: Mental health conditions have the ability to interrupt an individual's ability to participate in the labour force, and this can have considerable follow on impacts to both the individual and the state.

Method: Cross-sectional analysis of the base population of Health&WealthMOD, a microsimulation model built on data from the Australian Bureau of Statistics' Survey of Disability, Ageing and Carers and STINMOD, an income and savings microsimulation model was used to quantify the personal cost of lost income and the cost to the state from lost income taxation, increased benefits payments and lost GDP as a result of early retirement due to mental health conditions in Australians aged 45-64 in 2009.

Results: Individuals aged 45 to 64 years who have retired early due to depression personally have 73% lower income then their full time employed counterparts and those retired early due to other mental health conditions have 78% lower incomes. The national aggregate cost to government due to early retirement from these conditions equated to $278 million (£152.9 million) in lost income taxation revenue, $407 million (£223.9 million) in additional transfer payments and around $1.7 billion in GDP in 2009 alone.

Conclusions: The costs of mental health conditions to the individuals and the state are considerable. While individuals has to bear the economic costs of lost income in addition to the burden of the conditions itself, the impact on the state is loss of productivity from reduced workforce participation, lost income taxation revenue, and increased government support payments--in addition to direct health care costs.

Item ID: 41395
Item Type: Article (Research - C1)
ISSN: 1471-244X
Keywords: health economics; living standards
Additional Information:

© 2011 Schofield et al; licensee BioMed Central Ltd.

This is an Open Access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/2.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Funders: Australian Research Council (ARC), Pfizer
Projects and Grants: ARC LP07749193
Date Deposited: 24 Nov 2015 03:48
FoR Codes: 14 ECONOMICS > 1402 Applied Economics > 140208 Health Economics @ 100%
SEO Codes: 91 ECONOMIC FRAMEWORK > 9102 Microeconomics > 910209 Preference, Behaviour and Welfare @ 50%
92 HEALTH > 9204 Public Health (excl. Specific Population Health) > 920408 Health Status (e.g. Indicators of Well-Being) @ 50%
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