Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/89967
Authors: 
Layard, Richard
Chisholm, Dan
Patel, Vikram
Saxena, Shekhar
Year of Publication: 
2013
Series/Report no.: 
IZA Discussion Paper 7620
Abstract: 
This paper is a contribution to the second World Happiness Report. It makes five main points. 1. Mental health is the biggest single predictor of life-satisfaction. This is so in the UK, Germany and Australia even if mental health is included with a six-year lag. It explains more of the variance of life-satisfaction in the population of a country than physical health does, and much more than unemployment and income do. Income explains 1% of the variance of life-satisfaction or less. 2. Much the most common forms of mental illness are depression and anxiety disorders. Rigorously defined, these affect about 10% of all the world’s population – and prevalence is similar in rich and poor countries. 3. Depression and anxiety are more common during working age than in later life. They account for a high proportion of disability and impose major economic costs and financial losses to governments worldwide. 4. Yet even in rich countries, under a third of people with diagnosable mental illness are in treatment. 5. Cost-effective treatments exist, with recovery rates of 50% or more. In rich countries treatment is likely to have no net cost to the Exchequer due to savings on welfare benefits and lost taxes. But even in poor countries a reasonable level of coverage could be obtained at a cost of under $2 per head of population per year.
Subjects: 
mental illness
welfare benefits
healthcare costs
life-satisfaction
JEL: 
I10
I14
I18
Document Type: 
Working Paper

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