December 12, 2016

New report calls for governments to prioritize wellbeing

Governments should do more to tackle mental health issues, according to a new report that argues that health and relationships are more important to wellbeing than economic factors.

The report argues that eliminating depression and anxiety would reduce unhappiness by 20%, compared to a reduction of just 5% if poverty were eliminated.

The report, published by the London School of Economics (LSE), collected responses from 200,000 people in four countries on how different factors such as employment, income, and relationship status, affected their happiness.

Lead author Richard Layard, LSE professor of economics and IZA research fellow, said that the report suggested a need for a new role for governments.

Professor Layard commented that: “In the past, the state has successively taken on poverty, unemployment, education and physical health. But equally important now are domestic violence, alcoholism, depression and anxiety conditions, alienated youth, exam mania and much else. These should become centre stage.”

Next week, IZA World of Labor will publish a new article by Professor Layard on the economics of mental health. In the article, Layard argues that: “If mentally ill people received treatment so that they had the same employment rate as the rest of the population, total employment would be 4% higher, adding many billions to national output.”

Related articles:
Relative deprivation and individual well-being by Xi Chen
Happiness as a guide to labor market policy by Jo Ritzen
Can “happiness data” help evaluate economic policies? by Robert MacCulloch
Unemployment and happiness by Rainer Winkelmann
Explore more IZA World of Labor content about happiness and labor policy