The Economic Case for Preventing Mental Ill Health

Executive summary

Mental ill health affects more than one in five people across OECD and EU countries

Mental health conditions are remarkably prevalent, with estimates indicating that slightly over 20% of individuals in OECD and EU countries experienced a mental disorder in 2023, resulting in one of the most significant public health and economic challenges. This figure is likely to underestimate the true scale of the problem, as many milder conditions go undiagnosed or remain unreported due to persistent social stigma and limitations within existing health systems. Among diagnosed cases, anxiety disorders are the most common, accounting for approximately 40% of all cases. These are followed by depressive disorders at 20% and substance use disorders – which include alcohol use disorders – at 17%. Other less prevalent disorders include severe conditions such as schizophrenia and bipolar disorders, as well as eating disorders, autism spectrum disorders and intellectual disabilities, which are not the focus of this publication.

Certain population groups are more affected than others. Women consistently report higher rates of anxiety and depression, while men more often experience substance and alcohol use disorders. In recent years, the increase in mental health conditions has been particularly evident among adolescents and young adults, with more than one in four individuals aged 15‑24 currently experiencing a mental disorder. This is a cause for concern because when such conditions emerge early in life and remain untreated they often persist into adulthood, with lasting consequences for health and productivity.

Multiple societal and environmental shocks are driving the trend in mental disorders

Mental ill health reflects a complex interplay of social, economic and environmental factors. The restrictions and social isolation imposed during the COVID‑19 pandemic had a profound impact on well-being – particularly for children and adolescents. Beyond the pandemic, broader macroeconomic shocks and increasing economic disparity also contribute to worsening mental distress. Evidence from high-income countries suggests that rising income inequality is associated with approximately 19% higher rates of mental health problems across the population.

Environmental and geopolitical instability also play a critical role. Climate change anxiety has emerged as a significant concern for the younger generation, with 84% of young people globally reporting moderate to extreme worry about the future of the planet. Furthermore, recent wars and geopolitical conflicts have had an alarming effect on mental health, resulting in elevated rates of post-traumatic stress and generalised anxiety that can affect multiple generations. The problematic use of social media is another emerging driver – particularly among young people – and is linked to increased levels of depression, although its impact can be mediated by factors such as sleep quality and physical activity.

Poor mental health imposes a significant burden on individuals, health systems and the economy

The impact of mental ill health extends far beyond the individual, creating substantial costs for health systems, society and the wider economy. OECD microsimulation work estimates that major depressive disorders, generalised anxiety disorders and alcohol use disorders will lead to a 2.5‑year reduction in healthy life expectancy across the EU during 2025-2050. At the population level, this equates to approximately 28 000 premature deaths every year. While mental disorders primarily affect quality of life, severe cases of depression and alcohol use also contribute to increased fatality rates and a reduction in overall life expectancy.

The financial implications are equally stark. Mental health conditions are estimated to account for roughly EUR 76 billion in annual healthcare costs across the EU, which represents approximately 6% of total health budgets. A significant portion of these costs arises because mental disorders often exacerbate other physical health conditions, leading to more complex and expensive treatments. Furthermore, the impact on the labour market is profound, with poor mental health estimated to result in an average annual reduction in GDP of 1.7% during 2025-2050. This means that GDP forecasts for any year in the range would be 1.7% higher in the absence of mental ill health. This loss is primarily driven by decreased workforce participation, higher rates of absenteeism and “presenteeism”, where employees are physically present but unable to function at full productivity.

Severe gaps in access to healthcare persist despite the widespread adoption of national mental health policies

Most OECD and EU countries have recognised the scale of the challenge and have implemented national mental health policies. Currently, 41 out of 43 surveyed countries have a formal policy in place, and 38 have developed specific implementation strategies. Efforts to integrate mental health into primary healthcare, schools and workplaces are becoming more common.

However, despite these policy frameworks, a massive treatment gap remains. Nearly two‑thirds of individuals in the EU who require mental healthcare are estimated to face inadequate access to services. This stands in sharp contrast to the 3.8% of people who report unmet needs for general medical treatments. Beside persisting stigma, several barriers prevent individuals from receiving the help they need: many therapies require out‑of‑pocket payments; specialised services are harder to access in rural areas; and shortages of professionals result in long waiting times.

Scaling up evidence‑based interventions offers a cost-effective pathway to better health outcomes

This report identifies several highly effective interventions that can be delivered across primary care, school and workplace settings. Cognitive behavioural therapy remains a cornerstone of treatment and prevention, helping individuals reframe negative thinking patterns. Other successful approaches include mental health literacy programmes, mindfulness-based techniques and digital tools that provide remote support for mild to moderate symptoms.

OECD modelling demonstrates that scaling up these interventions in the EU between 2023 and 2050 would generate significant health and economic gains. Interventions in primary healthcare settings tend to be the most effective – particularly face‑to-face psychotherapy. Most of these interventions are highly cost-effective, falling well below the threshold of EUR 50 000 per disability-adjusted life year gained. In many cases, the economic gains from improved workforce productivity and reduced healthcare spending would exceed the costs of implementing the programmes. However, the current aggregate impact of these interventions remains modest because of limited coverage; for instance, even the most effective primary care intervention would only reduce mental health-related costs by 4% at current implementation levels.

Achieving a greater impact requires addressing the root causes of mental ill health and setting more ambitious coverage targets

To address the burden of mental ill health effectively, health systems must move beyond isolated interventions and adopt a more systemic approach. This report outlines three priority areas for future policy action:

1. Enhancing intervention design and implementation: policymakers should focus on “best practice” designs that combine clinical services with destigmatisation campaigns and peer-based support to encourage help-seeking.

2. Expanding coverage and investment: more ambitious targets for service coverage are necessary to achieve meaningful population-level health improvements. Achieving universal access would require a 41% increase in mental health spending and a significant expansion of the professional workforce in the EU during 2025-2050.

3. Tackling the root causes: public health efforts must be complemented by social and economic policies that address the underlying drivers of mental distress. Strengthening social welfare systems and addressing economic insecurity and unemployment are critical steps, as countries with more generous social protections consistently report better mental health outcomes.

While the challenge of mental ill health is extensive, it is not insurmountable. By investing in cost-effective interventions and addressing the socio‑economic factors that drive poor mental health, countries can improve the lives of millions and secure a more resilient and productive future.