Experts warn that mental health is a $282 billion "macroeconomic crisis"

As income inequality continues to soar in the United States, researchers are working to more comprehensively measure the relationship between capitalism and declining mental health – an effort that experts say could help policymakers develop more effective solutions to the widespread mental health struggles plaguing Americans.

Americans’ collective mental health has been worsening for years. In 2023, the White House said the nation faced “a mental health crisis,” with 40% of U.S. adults having experienced depression or anxiety in 2021. That year, Gallup estimated that 22% of Americans experienced depression or anxiety severe enough to disrupt daily activities for two weeks or longer. Roughly a third of adolescents in the U.S. have an anxiety disorder, and in 2023, nearly one in five U.S. teens experienced a major depressive episode.  

In 2024, 43% of Americans said they feel more anxious than they did in 2023, according to the American Psychiatric Association’s annual mental health poll. Last year, 37% of Americans reported higher levels of anxiety compared to 32% in 2022. The latest data from the National Institutes of Health shows that 23% of the population, or approximately 57 million Americans, experiences some form of mental illness. 

“We genuinely see that a huge proportion of the population is severely affected and suffering from mental health issues,” Aleh Tsyvinski, professor of economics at Yale University, told Salon. “If this is not a macroeconomic crisis, then it's hard for me to think about what else may be a macroeconomic crisis.”

Tsyvinski, alongside researchers Boaz Abramson and Job Boerma, recently published a “first-of-its-kind” study and model that measures the economic impact of Americans’ mental health struggles. Published as a working paper by the National Bureau of Economic Research in April, the model indexes for three characteristics of mental illnesses – rumination, negative thinking and reinforced behaviors – and attempts to measure how those characteristics affect a person’s consumption, job choice, savings and portfolio choices.

“We don't have a quantitative, macroeconomic framework to study mental illness,” Abramson told Salon. “And that is a necessary thing if you want to evaluate policies that try to improve mental health.” 

Measured as economic output, the study estimates that Americans’ mental health struggles collectively cost the U.S. economy $282 billion every year – the economic loss of the average recession. 

"A bidirectional relationship" between mental health and money

The NBER study is currently a “working paper;” meaning it hasn’t yet been published in a peer-reviewed journal. Over the next few months, the coauthors will present their research at symposiums and conferences around the U.S., where they’ll receive feedback and engage in discussions with fellow researchers. If things go according to its coauthors’ hopes, the study will be published in a top macroeconomic journal in a few years.

“We sort of get some pushback,” Abramson said. “What we're doing is new in macroeconomics. But our goal is not only to write this paper, but actually to construct a quantitative framework for studying … the interaction between mental health and the financial conditions of individuals and of the economy.”

For decades, a dominant approach among social scientists and epidemiologists has been to study socioeconomic factors, like income or homeownership, as individual and independent data points without “considering the broader social system,” Jerzy Eisenberg-Guyot, a research scientist and assistant professor of epidemiology at New York University, told Salon. 

But in recent years, several studies have attempted to challenge that approach. In 2015, Sociology of Health and Illness published a study – titled “Anxious? Depressed? You might be suffering from capitalism” – that suggests “traditional indicators of socioeconomic status,” such as income, education or homeownership, are “incomplete,” in part because those factors “rise from numerous political and economic processes,” which may themselves have “significant and direct effects on health.” 

“Research has not tended to emphasize the causes of socioeconomic inequality, but rather the effects of socioeconomic position on health,” the study states. 

A 2022 paper in Community Mental Health Journal outlines how the country's steadily increasing rates of mental illness over the past 15 years – as well as increases in deaths from suicide, overdose and complications of alcoholism – “are due to neoliberal capitalist policies and ideologies.” 

And in 2023, researchers from University College London, the Icahn School of Medicine at Mount Sinai and other institutions presented a framework for a field of neuroscience that “can and should illuminate the effects of neoliberal capitalism on the brains and minds of the population living under such socioeconomic systems.”

The relationship "that causes the health inequities"

Eisenberg-Guyot coauthored a chapter on capitalism’s mental health impacts in the 2022 Oxford Textbook of Social Psychiatry, defining capitalism as “a socioeconomic system characterized by the private ownership of the means of production and the exploitation and domination of wage labor for profit.” 

Life under that socioeconomic system, Eisenberg-Guyot said, can lead to a society built on “more and less powerful groups struggling for control over resources.”

“So far as employers are driven to increase profits and lower workers' wages, profits and employers can come at the expense of workers’ health,” Eisenberg-Guyot said. “That structured relationship between employers and workers is what causes health inequities, because the wealth of employers relates sort of inversely to labor costs, and positively to labor effort.”

Between 1979 and 2019, wages for the lowest tenth percentile of earners rose just 3% after inflation. And in the 41-year stretch from 1979 to 2020, U.S. workers’ productivity went up 61.8% – while wages grew by 17.5%.

Economic anxiety feels uniquely high. Earlier this year, household credit card debt hit a record high $1.14 trillion. Nearly 40% of Americans don’t think they’ll ever be able to afford to buy a house, and 70% of the workers surveyed in a 2024 MarketWatch research report said they’re “taking steps to prepare for a layoff.”  

In a 2023 study published by the American Psychological Association, 63% of U.S. adults said money was “a significant source of stress” in their lives. Among 18-34-year-olds, that figure rose to 82%. Nearly one in three Americans are “just getting by financially” and costs of “day to day expenses” were among the top financial stressors for 61% of U.S. adults in 2023.

And among U.S. adults who have gone to therapy or visited a psychiatrist in the last year, 59% say they’re worried about losing access to mental healthcare. Separately, nearly 40% of U.S. adults with health insurance worry about losing that insurance.  

"Recognition can be empowering"

One novel element of the NBER study is its attempt to measure how mental illness impacts the way we spend and earn money. Individuals experiencing symptoms of mental illness, the study indicates, tend to work fewer hours overall, invest less in things like housing and stocks and pursue fewer high-earning jobs. Those behaviors typically translate to lower earnings, the study found, which further limits one’s ability to treat their mental illness. 

“We have a bidirectional relationship between financial stress and mental health,” Abramson said. “Mental health impacts your financial stress, but also, financial stress impacts your mental health.”

Discussions about rising rates of mental illness and proposed solutions are often centered on making therapy more affordable or otherwise accessible. But these researchers told Salon that a significant goal driving their work is to create smarter, more effective approaches to improving overall mental health that address the crisis’ root causes.

“The response is always to want more treatment, more therapists, the whole gamut of professionals, instead of looking to see why on earth has our society produced this level of problems,” Richard Wilkinson, a prominent epidemiologist and public health researcher, told Salon. 

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Wilkinson, alongside Kate Pickett, wrote “The Spirit Level,” a groundbreaking work on the intersection of capitalism and mental health. Published in 2009, the book analyzed public health information and “demonstrated conclusively the pernicious effects of economic inequality,” according to The Guardian, which put it at No. 79 on its list of The 100 Best Books of the 21st Century.   

While therapy is a proven tool to improve mental health – 75% of individuals who seek out therapy report benefits – it’s often pitched as a catch-all solution to a comprehensive, systemic problem that requires more than one solution, experts say. 

In 2022, nearly a quarter of Americans said they had seen a therapist in the past year. Teletherapy became a $1.4 billion industry in 2022 – a quick ascent from the $418 million ecosystem that existed in 2018. In 2023, psychiatrists reported an overall increase in the severity of their patients’ symptoms, and found patients required longer-than-average courses of treatment. “Psychologists are often working at the limits of their capacity and levels of burnout are high,” a 2023 report found.

 “Therapy Isn't Fixing America's Mental Health Crisis,” Time Magazine declared in 2023. That more people than ever are going to therapy – yet rates of anxiety and depression remain stubbornly high – suggests other interventions may be useful, experts say. 

“We need to bring the same level of quantitative, theoretical rigor, based on the frontier of research in psychiatry, to the question of macroeconomics and mental health that we bring to the question of whether the interest rate should be decreased by quarter point,” Tsyvinski said.

One small intervention that can help individuals in the near-term? The simple act of recognizing that forces outside our control affect our mental health, which can help individuals understand that they aren’t “to blame,” so to speak, for their mental health struggles, says Eisenberg-Guyot. 

“Pointing to the role of structural factors in mental illness, instead of blaming it on individual shortcomings, I imagine, can be sort of empowering for people,” Eisenberg-Guyot said. “Obviously, it's not totally emancipatory to realize that, because you still wish you could address the structural factors … But maybe some recognition can be empowering."