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The Economic Cost of Mental Illness on Corporate Operations in the UK, USA, and Canada

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In a 2008 editorial in The American Journal of Psychiatry, Thomas R. Insel, M.D. estimated that “serious mental illness is associated with an annual loss of earnings totaling $193.2 billion” within the US economy. This analysis aligns with a range of scientific literature emphasizing the economic cost of mental illness on employers, specific industry sectors, and national economies.

Overview of Costs

A 2007 study estimated that the annual human capital losses in the American labor force were $14.1 billion and $36.6 billion for major depressive disorder and bipolar disorder alone. Beyond these enormous economic impacts, multiple scholars and researchers have since expressed concerns that the macroeconomic costs of mental illness not only exceed these estimates but have risen over the past decade. The Tufts Medical Center’s 2017 white paper, The High Cost of Mental Disorders: Facts for Employers, claims that workplace costs of mental disorders have been historically underestimated due to:

  • Erroneous reportage by employee insurance coverage and internal medical claims.
  • Employer tendencies to downplay the severity and significance of common mental disorders such as major depression, anxiety, alcohol misuse, and drug abuse.
  • Stigma associated with mental illness discouraging employees from seeking requisite medical support and disclosing their illness(es).

Causes: Presenteeism, Absenteeism, and Turnover

No single industry carries a higher correlation between industry and employee incidences of major depression and other common mental disorders. However, some industries, such as accommodation and food services, have a higher likelihood of specific disorders like alcohol and substance abuse.


A primary cost factor for businesses with employees who suffer from major depressive disorder (MDD) is impaired work performance, or presenteeism. A 2011-2015 study found that in a two-week period, employees suffering from depression spent 13% to 29% of their time with impaired working performance. The Tufts Medical Center white paper suggests that workplace depression negatively affects multiple dimensions of performance, including interpersonal and communication skills, time management, concentration, and physical labor abilities.


Employees with depression missed an average of six to eight more days per year than non-depressed employees. A study with a larger sample of insurance-covered employees with depression yielded an average of 26 additional absence days per year more than non-depressed workers. The CDC estimates that productivity losses linked to absenteeism cost employers an average of $255.8 billion in the US, at $1,685 per employee annually.

Turnover, Disability, and Mortality

The costs of losing and replacing a valued worker are significant. According to a 2010 study used in Tufts Medical Center’s white paper, it costs approximately $4,000 to replace each employee. Workers who suffer from untreated depression, MDD, and other mental disorders are more vulnerable to higher-than-average industry-wide turnover events, which is costly for businesses.

Knock-On Effects of Untreated Mental Illness in Employees

Adverse macroeconomic market conditions leading to major job loss events cause depression-suffering workers to struggle to find replacement employment, leading to chronic underemployment and worsening mental health disorders. The National Alliance on Mental Illness reports a higher unemployment rate for adults with mental illnesses compared to those without, emphasizing the potential for companies to miss out on hiring talented employees due to mental illness.

Looking Forward

Employers can benefit their companies and the economy by funding employee mental health support. Improved assessment methods, reduction of stigma, and accessible support for those in need will provide broad economic and social benefits to both private and public endeavors.


  1. Insel, Thomas R., et al. “Assessing the Economic Costs of Serious Mental Illness.” American Journal of Psychiatry, 1 June 2008.
  2. Kessler, Ronald C., et al. “Prevalence and Effects of Mood Disorders on Work Performance in a Nationally Representative Sample of U.S. Workers.” American Journal of Psychiatry, vol. 163, no. 9, 2006, pp. 1561–1568.
  3. Lerner, Debra, et al. “The High Costs of Mental Disorders: Facts for Employers” Tufts Medical Center Program on Health, Work and Productivity: One Mind at Work, 2017
  4. Insel, Thomas R., et al. “Darkness Invisible: The Hidden Global Costs of Mental Illness.” Foreign Affairs, vol. 94, no. 1, 2015, pp. 127–135.
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