As income inequality escalates in the United States, researchers are intensifying efforts to quantify the link between capitalism and deteriorating mental health. Experts believe these insights could aid policymakers in crafting more effective solutions for the pervasive mental health issues affecting Americans.
Mental health concerns in the U.S. have significantly worsened over recent years. In 2023, the White House labeled the situation a “mental health crisis,” noting that 40% of U.S. adults experienced depression or anxiety in 2021. Gallup reported that 22% of Americans faced severe enough depression or anxiety to disrupt daily activities for at least two weeks that year. Alarmingly, about one-third of adolescents in the U.S. suffer from anxiety disorders, and nearly one in five teens reported experiencing a major depressive episode in 2023.
Recent polling from the American Psychiatric Association revealed that 43% of Americans felt more anxious in 2024 compared to the previous year, a rise from 37% in 2023 and 32% in 2022. Data from the National Institutes of Health indicates that approximately 57 million Americans, or 23% of the population, live with some form of mental illness.
Aleh Tsyvinski, a Yale University economics professor, emphasized the gravity of the situation, stating, “If this is not a macroeconomic crisis, then it’s hard for me to think about what else may be a macroeconomic crisis.”
Tsyvinski, along with researchers Boaz Abramson and Job Boerma, recently released a groundbreaking study measuring the economic impact of mental health issues on Americans. This study, published as a working paper by the National Bureau of Economic Research in April, assesses the influence of three mental illness characteristics—rumination, negative thinking, and reinforced behaviors—on individual consumption, job choices, and savings.
“There isn’t a quantitative, macroeconomic framework to study mental illness,” Abramson noted. “Establishing one is essential for evaluating policies aimed at improving mental health.”
The study estimates that mental health struggles cost the U.S. economy $282 billion annually, equating to the economic loss seen during an average recession.
Exploring the Bidirectional Relationship Between Mental Health and Financial Stress
Although the NBER study is still a working paper and not yet peer-reviewed, its authors plan to present their findings at various symposiums and conferences in the coming months. They hope to eventually publish in a leading macroeconomic journal.
“We encounter some resistance,” Abramson said. “What we’re doing is unprecedented in macroeconomics. Our aim is to build a framework for understanding the interplay between mental health and economic conditions.”
Traditionally, social scientists have analyzed socioeconomic factors like income and homeownership in isolation, neglecting their interconnectedness within the broader social framework. Jerzy Eisenberg-Guyot, a research scientist at New York University, explained that mental health can affect financial stress, which in turn impacts mental well-being.
In recent years, several studies have begun to challenge this traditional view. A 2015 study in Sociology of Health and Illness argued that common indicators of socioeconomic status are inadequate, as they overlook the complex political and economic processes influencing health. Similarly, a 2022 paper in Community Mental Health Journal linked rising mental illness rates and increased deaths from suicide and overdose to neoliberal capitalist policies.
Eisenberg-Guyot, who coauthored a chapter on capitalism’s mental health impacts in the 2022 Oxford Textbook of Social Psychiatry, defined capitalism as a system that prioritizes profit over the welfare of workers. He noted that the pursuit of profit often comes at the expense of employee health, thereby contributing to health inequities.
Data shows stagnation in wage growth for the lowest earners between 1979 and 2019, while productivity increased significantly. Economic anxiety is palpable, with household credit card debt reaching a record $1.14 trillion. Nearly 40% of Americans feel they may never afford a home, and many workers are preparing for potential layoffs.
A 2023 American Psychological Association study revealed that 63% of U.S. adults identify money as a significant stressor, with that figure climbing to 82% among 18-34-year-olds. Furthermore, a large percentage of individuals who have sought mental health care express concern about losing access to services.
Reassessing Mental Health Interventions
The NBER study innovatively examines how mental illness affects spending and earning patterns. It found that individuals with mental health symptoms often work fewer hours and invest less in housing and stocks, leading to lower earnings and further restricting their ability to seek treatment.
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