Calculating the economic impact of mental health

23 August 2022



A new study from Aarhus University in Denmark and supervised by University of Queensland Professor, John McGrath, has shown how costly mental health disorders are for society.

Maria Christiansen, a PhD student at the National Centre for Register-based Research, examined the costs of health care for people with different types of mental health disorders and compared that to 10 individuals of the same age and gender, without that type of disorder.

Professor John McGrath, who is a conjoint Professor with the Queensland Brain Institute, said while this study was conducted in Denmark using Danish health registers and costs, the overall findings could be extrapolated to other high-income countries such as Australia.

“Mental health disorders are common – in Denmark, more than 40 per cent will have a diagnosed mental health disorder in their life. Here, data shows that nearly half (46 per cent) of Australians aged 16–85 had experienced a mental disorder during their lifetime,” Professor McGrath said.

“From our past research, we know having a mental health disorder is associated with an increased risk of disability and premature mortality. We also know people with these disorders are some of the most stigmatised and marginalised members of society.

“This new study has shown that people with mental health disorders also have lower earning ability and higher health care costs. While the precise costs would differ between Australia and Denmark, there are important lessons for Australia here also."

Having a mental health disorder can disrupt a person’s participation in the workforce. Some people may need to take sick leave and some people may require a disability pension. Having a job is important for earning an income and for a person’s self-esteem, social identity and connectedness with the community.

The Danish study shows that the loss of income associated with mental disorders is much larger than the costs of treatment by the health sector. The impact of mental disorders on workforce participation was a focus of the Australian Productivity Commission Inquiry Report on Mental Health.

Professor McGrath said the research provides a fuller picture of the impact a mental health disorder can have on an individual’s life and on our society.

“This study provides new evidence to support additional investment in research to understand mental health disorders, enhanced mental health services and return to work programs,” Professor McGrath said.

The study team has developed an interactive website with summary data and an animation that explains their results.

The research was supported by the Danish National Research Foundation as part of the Niels Bohr Professorship awarded to QBI Professor John McGrath and first published in the npj Mental Health Res (DOI