Role of mental health in GDP growth

Kazi Mohammad Aymanullah and Nusrat Jahan Urmi | Monday, 12 February 2024

Bangladesh, a steadily growing economy since achieving independence in 1971, boasts positive developments in all sectors of its economy. Headlining as the model of growth in many places, is it efficiently utilising its actual potential or are these just tall tales? As it is evident that regardless of Bangladesh’s positive developments, an estimated 15-35 per cent of the population is affected by mental health issues, which negatively impacts the country’s overall growth. It is undeniable that mental health has been negatively impacting the rise of the economy, particularly when it comes to the nation’s Gross Domestic Product. A key factor like mental health which has a major significance in the Gross Domestic Product growth, productivity and many other factors worldwide is a huge taboo to even talk about in a country like Bangladesh. Historically and even in this modern age, societal norms have made it impossible to address the severely disregarded issue of “mental health”.
The global outbreak of Covid-19 has caused a significant economic downturn worldwide. As a result, there has been a widespread increase in mental health issues among individuals. Unfortunately, the prevailing cultural belief that discussing mental health is a sign of weakness, and the denial of the existence of mental health problems, has created a barrier to addressing these issues. Consequently, it has become difficult to openly talk about mental health and find effective solutions that can benefit individuals and contribute to the economic growth of Bangladesh. The National Centre for Biotechnology Information has found that the prevalence of depression (57.9 per cent), stress (59.7 pert cent) and anxiety (33.7 per cent) symptoms in the adult population is now much higher than pre-pandemic rates.
Many individuals who lost their jobs due to Covid-19 continue to look for suitable jobs. A considerable number has neither recovered mentally nor sought treatment for the crippling effects of Covid-19. These few facts are enough to explain that low labour productivity and the fact that Covid-19 related unemployment is still there. If mental health issues are overcome, the above problems along with a lot of other complications can positively influence the natural growth of the country in the years ahead. Both developed and developing countries experience high rates of mental illness. It primarily affects persons of working age, it not only results in tremendous distress but also significant economic loss.
A recent survey (2020-2023) from the World Health Organization (WHO) suggests that many working-age people struggle with major mental health issues like depression, anxiety, and a continual feeling of being distracted. Mental health difficulties are increasingly the leading cause of sickness in those under 65, especially in developed economies. Mental illness accounts for 40 per cent of all known diseases. In this dynamic context, earnings are a major cause of depression and less interest in job sectors.
This challenge is especially important in Bangladesh, where the inflation of 2023 is 2.15 percentage points above the 2021 baseline. The effects are far-reaching; thus certain firms do not even increase nominal wages to keep costs down. However, this lowers real wages, making it difficult to purchase goods and services. Incessant rises in the cost-of-living force workers to cut back on spending. Due to lower income, workers will not be able to manage their everyday lives.
The minimum wages have the potential to address wage inequality and facilitate the distribution of productivity improvements towards increased wages. Furthermore, minimum wages can also have a positive impact on overall labour productivity, both at the level of individual firms and across the entire economy. At the organizational level, employees may exhibit increased motivation to enhance their work performance.
At the macroeconomic level, the implementation of minimum wages can lead to the substitution of less productive firms with more productive ones, as well as the enhancement of efficiency among existing firms. These strategies have the potential to enhance productivity at the macroeconomic level. Hence, a low minimum wage creates a diminished motivation among workers to engage in labor, so adversely impacting their mental well-being. Due to the reluctance of employers to work at wages below the minimum threshold, a significant number of individuals find themselves unemployed, leading to the development of serious signs of depression. Once again, individuals who earn wages below the minimum threshold face challenges in sustaining a suitable standard of living, leading to adverse effects such as depression and a decline in both labour productivity and overall GDP development.
It has been observed that Labour productivity determines a nation’s long-term economic growth. Labour productivity can be affected by worker’s well-being. Mental health stability enhances work productivity. Figure 02 shows that worker productivity declined significantly in 2020 after a decline in 2017, then recovered. However, labour productivity is lower in 2023 than in previous years. Mental health is one of several factors that lowers productivity. From 2020 to 2023, when the Covid-19 epidemic began, mental health has become a widespread issue affecting students and workers. This harmed productivity levels. Mental health is a major issue for both working and unemployed individuals.
In particular, unemployed people may lose motivation to actively pursue work due to low job prospects, which can harm their mental health. Long-term unemployed people commonly have depression and anxiety. Unemployed people’s motivation drops, reducing their incentive to actively seek work, which raises the unemployment rate and causes them to permanently leave the labour market. Bill Phillips shows a negative relationship between unemployment and inflation which is known as The Phillips curve. Thus, a rise in unemployment is anticipated to raise inflation in the near future. However, a nation’s economy is heavily influenced by individual mental health. With low productivity the economy will produce and consume less, thus the GDP of a country will decrease.
As governments currently struggle with complicated financial institutions, labour markets, and inflation, employee mental health must be prioritised. Instead, it should be recognised as a foundation of economic success, where mental health is as vital as fiscal policy and labour laws. The inability to discuss mental health difficulties creates additional issues. Thus, this sector’s neglect needs greater government support than ever to enable the economy to reach its full potential. Mental health difficulties can lower workplace productivity, absenteeism, and job satisfaction.
In Bangladesh, where mental health issues are common and stigmatic, workplace mental health is a serious concern. Bangladeshi employers can address workplace mental health despite the hurdles like the widespread presence of stigma, social discrimination and isolation due to misjudgment of mental health issues in the workplace. Education, awareness, and support are needed to manage workplace mental health. Employers may foster a mental health-friendly workplace. To build a mental health-friendly workplace, organizations must raise awareness, educate, and collaborate. Organisations must address the difficulties in a workplace and modify, mitigate and remove the workplace risks to generate a safe environment for workers. Moreover, management training for mental health includes recognising and responding to emotional distress, improving communication abilities, and understanding how job stressors impact mental health. By receiving workers training in mental health literacy and awareness improves knowledge and reduces stigma related to mental health conditions at work. Therefore, it is essential to establish a comprehensive nationwide network for mental health services in order to enable employees to perform efficiently and enhance productivity as a whole.

Kazi Mohammad Aymanullah & Nusrat Jahan Urmi are undergraduate students of Economics at Brac University. [email protected] & Nusrat.jahan.urmi1g.bracu.ac.bd