Lessons from OECD countries: mental health is critical for human capital development

Publication date: 
26 October 2018

At the World Bank Group (WBG)-International Monetary Fund Annual Meetings earlier this month in Bali, Indonesia, WBG President Dr. Jim Kim posed a critical question: “What will it take to promote economic growth and help lift people out of poverty everywhere in the world…How will they reach their ambitions in an increasingly complex world?”  

The key, President Kim noted, is for countries to make investments in people – ensuring that people accumulate the health, knowledge and skills needed to realize their full potential and that they can put those skills to use across the economy. In response, the WBG launched the Human Capital Project, an effort to accelerate scaled and smarter investments in people around the world, and a Human Capital Index to measure the current and potential productivity of a country’s people.
As the same time as the Bali Annual Meetings, we were in London at the Global Mental Health Ministerial Summit, hosted by the U.K. Government and the Organization for Economic Co-operation and Development (OECD) with the support of the World Health Organization, making the case that investing in mental health is a critical but often overlooked investment in individual potential, human capital accumulation and economic success. Sadly, due to widespread global inaction, there is still limited or no access to integrated mental health services in most countries, which leaves mental health services under-resourced and creates a major problem for accessing appropriate care. Stigma and discrimination only compound the problem.
Yet this approach is myopic. A growing body of evidence shows that the social and economic losses related to unattended mental conditions, including substance use disorders, are staggering. In the world’s most advanced economies – the 36 OECD countries – mental ill health affects an estimated 20 percent of the working-age population at any time, and its direct and indirect economic costs are estimated to account for about 3.5 percent of gross domestic product (GDP), equivalent to US$1.7 billion in 2017.
In the wealthy OECD countries, which spend on average 9 percent of GDP on health care, the high economic cost associated with mental conditions is largely driven not by mental health care expenditure, but by lost productivity in the working-age population (see Figure 1). Indeed, people suffering from mental ill health are less productive at work, are more likely to be out sick from work and when they are out sick are more likely to be absent for a longer period. Around 30 to 40 percent of all sickness and disability caseloads in OECD countries are related to mental health problems, according to a 2015 OECD report.