New research highlights the cost-effectiveness of preventive policies in reducing mental distress and improving labor force participation, income, and health outcomes.
Study: Psychological distress in adolescence and later economic and health outcomes in the United States population: A retrospective and modeling study. Image Credit: Monkey Business Images/Shutterstock.com
The U.S. government frequently evaluates the outcomes of investing in nationwide policies, including their broader social and economic impacts.
A recent study published in PLOS Medicine explored the link between psychological distress during adolescence and its effects on health and economic outcomes in adulthood. The study also used these associations to estimate how implementing supportive policies might influence the economy.
Background
Government budget analyses often overlook the long-term health and economic consequences of adolescent mental distress. As a result, policies supporting adolescent mental health are typically viewed as costs rather than investments with future benefits.
Substantial evidence suggests that investing in adolescent mental health yields significant long-term economic advantages. These include higher rates of labor force participation and a decreased likelihood of reliance on welfare programs.
Such benefits may arise from helping young people navigate environmental challenges and develop strategies to manage intellectual, social, physical, or emotional difficulties.
However, existing economic models used by government analysts rarely capture these effects. This is primarily due to incompatibilities between the parameters employed in research studies and the inputs required for these models.
The recent study sought to bridge this gap by developing more compatible parameters and assessing how incorporating these adjustments might alter budget projections.
About the study
The study analyzed a nationally representative cohort of young people aged 15 to 17 in the year 2000, using data from the National Longitudinal Study of Youth 1997. The sample included 3,343 individuals, of whom 47% were Black or Hispanic, 43% had developmental or health issues, and 4.4% experienced clinical psychological distress.
Mental health assessments were conducted using the Mental Health Inventory-5 (MHI-5), while health and economic outcomes were measured approximately a decade later. Researchers accounted for various confounding factors, such as demographic, familial, environmental, and academic influences.
In addition to race and ethnicity, variables included neighborhood safety, smoking habits, delinquent behavior, higher education aspirations, child health (including congenital disabilities and intellectual disabilities), caregiver education and financial stability, family and parental engagement, household environment, school quality, and academic skills.
Participants were classified as either distressed or non-distressed based on their MHI-5 scores, with scores of 3 or less indicating distress and scores of 4 or more indicating non-distress. The group was further categorized by symptom severity according to the MHI-5 scale.
Outcomes assessed roughly 10 years later included health status, as well as economic factors such as employment, income, total assets by age 30, and educational attainment.
Economic outcomes
Approximately ten years later, 84% of the cohort had participated in the labor force at some point during the preceding year. Their average annual wage was around $28,000, with a total of 1,483 hours worked on average. By the age of 30, their total assets averaged $29,419.
Within this group, 3% experienced clinical psychological distress after ten years, and 24% had completed a college degree by that time.
For those who reported mental distress during the previous month as adolescents, their labor force participation rate over the past year was approximately six percentage points lower compared to those without such distress.
Additionally, their total hours worked decreased by an estimated 201 hours, equivalent to 5.7 fewer work weeks, and their annual wages were $5,658 lower. By age 30, their total assets were $10,833 less than their peers without distress.
Educational outcomes were also impacted. The proportion of individuals who had taken at least some college courses was nine percentage points lower among those with adolescent mental distress, with more pronounced differences observed at higher levels of educational attainment.
Furthermore, self-rated health was poorer among this group, accompanied by an 11-percentage-point increase in Medicaid and Medicare coverage.
Effect of expanded-access policy
The researchers modeled the potential impact of a hypothetical policy aimed at increasing access to preventive mental health care for teenagers. This policy was projected to reduce the incidence of clinically significant psychological distress by 0.7 percentage points, reaching one in ten young people who might otherwise develop depression.
Over a ten-year period, such a policy could lead to a $52 billion reduction in federal budget demands, primarily through improvements in labor force participation within this cohort.
Importance of these results
The estimates from this study provide a valuable resource for government analysts seeking to evaluate the benefits of adolescent mental health policies. By incorporating these findings, analysts can model outcomes with greater reliability. The results align with previous research in this field, enhancing it through novel methods that leverage machine learning and more refined assumptions.
In 2023, funding for mental health care stood at $60 million annually, enabling care for 500 individuals per million dollars invested. To extend coverage to 25% of adolescents, an investment of at least $10 billion would be necessary. However, the potential economic savings from reaching just 10% of high-risk adolescents underscore the cost-effectiveness of such programs, even when considering only the financial impact.
Beyond direct mental health interventions, other policy areas also warrant attention. Strengthening school systems and community initiatives could address early drivers of mental distress, offering additional avenues for prevention and support.
Conclusions
The findings from this study underscore the critical importance of investing in adolescent mental health as a means of promoting long-term economic and social benefits. The analysis highlights how early intervention can significantly improve labor force participation, income levels, educational attainment, and overall health outcomes while reducing reliance on government programs.
Moreover, the study illustrates that policies aimed at preventing mental distress during adolescence are not merely expenditures but valuable investments with measurable returns.
By refining economic models to account for these impacts, government analysts can better assess the cost-effectiveness of mental health programs, making a compelling case for increased funding and broader implementation. The projected $52 billion in federal savings over a decade emphasizes the potential of such policies to alleviate fiscal pressures while supporting societal well-being.
Expanding access to preventive mental health care and addressing systemic contributors to distress, such as educational and community disparities, represents a strategic and impactful approach.
These findings call for a shift in perspective, recognizing that supporting adolescent mental health is both a moral imperative and an economic opportunity to build a healthier, more productive society.
