‘A Major Economic Cost’
Wednesday, November 25, 2009
Mental illness drags down Canada’s economic output by more than two per cent every year, according to the chief economist of the TD Bank.
In a speech to be delivered Wednesday afternoon in Toronto, Don Drummond pegs the loss to Canada’s economy from non-physical injuries at $33 billion annually.
The speech prepared for the Psychology Foundation of Canada says employees miss work because of stress and other mental problems, and people with mental and emotional issues tend to be less productive than happier workers.
“Mental illness [is] a major economic cost,” Drummond says. “We know a bit about the relationship, but more research is needed.”
Hard to measure
Economists often shy away from issues, such as mental illness, that are difficult to quantify. Drummond, however, says governments and policy makers can no longer afford to ignore stress and other mental issues.
He figures that poor mental health costs the economy 35 million lost workdays each year, along with disability costs equalling as much as 12 per cent of a company’s payroll.
Drummond’s speech notes that the stress of holding a job during difficult economic times is problematic enough. But the mental cost of not having employment can be much worse.
His presentation cites a study which estimates that 40 per cent of the unemployed in industrialized countries have “low well-being” versus 25 per cent of the population as a whole. And according to a 1985 study, the rate of attempted suicide is nine times higher for people who are out of work for more than a year.
Drummond said this implies that the economic toll of stress and other mental issues will rise as the jobless rate remains elevated. The latest Statistics Canada numbers show unemployment running at 8.6 per cent, up from 6.2 per cent a year ago as the economy has shed 400,000 jobs.
Seeking new metrics
Economists in many countries are grappling with measuring the cost of mental illness and other non-traditional factors.
In Canada, Drummond cited the work of Andrew Sharpe and Jean-François Arsenault of the Ottawa-based Centre for the Study of Living Standards in producing an alternative index of economic well-being, based on poverty rates and other factors besides the usual data on unemployment rates and personal incomes.