The Economy is Not Immune to Mental Illness...
On April 16, 2014, the Sewol ferry disaster that killed 304 people, including 250 high school students who were on an organized school trip to Jeju, brought huge despair and grief to South Korea. This disaster was marked by chaos, indecision, terror, and lies that were broadcasted live.
Unable to do anything but watch, the whole country exploded in anger, mourned, and were lost for words together -- and the next thing Korean society faced was a nation-wide depression. The economy was also bewildered. Restaurants and bars that were once bustling with people were empty. People could not have fun while others were mourning and were not ready to move on after such an absurd tragedy.
The nation-wide trauma of the Sewol ferry disaster led to a 1.6 billion dollar decrease in consumer consumption in 2014. “The interaction between the trauma from the Sewol ferry disaster and the economic downturn has created an air of anxiety, “ said Jun-Sang Yeo, a professor at Dong-Kuk University. “Our country must implement a social policy or a system that could alleviate widespread anxiety and arouse hope in the people of Korea to revive our economy.”
Globally, approximately 264 million people suffer from depression, many of whom are simultaneously battling anxiety. According to the Lancet Commission, mental disorders are increasing in every country in the world and will cost the global economy $16 trillion by 2030. In fact, in the United States, 1 out of 5 adults experience mental illness every year, and 1 out of 25 experience severe mental illness.
Nevertheless, mental health is rather perceived as a personal issue in today’s society, and the economic impact of mental health is often neglected. However, depression has a significant impact on economic productivity, and the country should not ignore the enormous economic costs of depression.
The most serious economic and social implication depression can lead to is loss of human capital. The suicide rate in the US has reached its peak, increasing by 33% since 1999, and there are more than 800,000 suicides per year globally. The suicide rates are especially high among those 15- to 24- years old, who will be making up the majority of the workforce in the near future.
Another downturn is that the pessimistic beliefs of many with depression can significantly undermine their motivation to work, which can indirectly reduce their productivity and job performance. According to the National Bureau of Economic Research, an individual’s pessimistic outlook on the returns to his or her labor efforts due to depression would lead to withdrawal - putting minimal efforts or only opting for safe, low-return jobs. As a result of decreased labor supply, total consumption, or expenditure, goes down. WHO estimates that the annual cost in lost productivity due to depression and anxiety is US $1 trillion.
It is time for more economists to direct their attention to a myriad of economic implications of mental illness and inform the country of its severity. Shedding a light on mental health from the economists’ perspective would bring attention to the importance of mental health. Our country must implement a better system for mental health care both for the well-being of people and for the continued economic growth.
Mental illness is certainly not a comfortable topic to bring up, but papering over the issue would only worsen the problem, and the aggregation of mental issues would lead to serious societal, economic consequences. Thus, the first and foremost step we need to take toward improving mental health is to raise awareness and make mental health care available and accessible to everyone.
Author: Grace Kang
Edited by: Belicia Rodriguez
