An Economic View of Mental Health

Image result for mental health work

“The factors involved in mental health are many and varied,” writes economist Isamu Yamamoto,

but for a working person, work styles in the workplace are an important factor. For example, if workers have to put in long hours, have little discretion over their work, or get few opportunities to change assignments or workplaces, this adds to their stress and increases the likelihood of deteriorating mental health.

On the other hand, there has been little research on mental health problems in the field of labour economics, which focuses on analysing work styles in the workplace. As for Japanese work styles, we see moves everywhere to try to change from so-called ‘Japanese employment’ practices. New aspects now include reducing long working hours, seeking a better work/life balance, diversity management, and encouraging women to be more involved in the workplace. These moves suggest that work styles under conventional Japanese employment practices create some kind of difficulty for workers. In other words, there are concerns that work styles under Japanese employment practices are a major factor in causing mental health to deteriorate.

In Yamamoto’s view, there are at least two economic approaches that could be utilized regarding mental health research:

  1. “The first approach is to reveal the characteristics of work styles, based on labour supply-and-demand mechanisms and internal labour market models, and use those characteristics to explain the impact that work styles have on workers’ mental health and the role of the business in mental health.”
  2. “The other approach is to reveal work style factors that impact mental health from observed data (controlling for heterogeneities between individual employees and businesses, and other noise), and to show how mental health affects objective indicators such as business productivity and profitability.”

Using findings from the Labor Market Analysis Using Matched Employer-Employee Panel Data research project, Yamamoto provides the following insights:

First, the research shows that factors affecting employees’ mental health include long work hours, job characteristics, workplace management methods, workplace climate, job transfers, and promotions, among others (Kuroda and Yamamoto 2016a, Sato 2016). Second, mechanisms that cause employee mental health to deteriorate include working irrationally long work hours because of such psychological tendencies as overconfidence bias (i.e. the employee has too much confidence in his or her own health), which could result in unexpected health damage (Kuroda and Yamamoto 2016b). Research also has looked at the impact of deteriorating mental health on corporate performance, with the results showing that businesses with higher sick leave or turnover rates of employees with mental disorders tend to have poorer performance as measured by return on sales (Kuroda and Yamamoto 2016c).

There are still just a few examples of research that validate mental health problems from an economic perspective, and more research needs to be done. Moreover, mental health is a major issue that is relevant to a number of fields, including medicine, epidemiology, industrial health, and psychology. As such, it is important to address it with interdisciplinary research, and researchers in various fields should collaborate in this regard.