Reducing teens' psychological stress could save billions for U.S. budget, study suggests

A growing body of research shows that improving adolescent mental health holds the potential to yield a variety of long-term benefits, such as greater labor force participation and lower usage of public assistance. However, government budget analysts rarely include these effects when assessing potential new policies because most studies on the topic do not present parameters that are comprehensive enough to be compatible with analysts' typical approaches for modeling policy outcomes.

To help address that gap, Counts and colleagues analyzed data on 3,343 participants in an ongoing study known as the National Longitudinal Study of Youth 1997, which regularly captures information through interviews. Using data from the year 2000, when participants were aged 15 to 17, and again from 2010, the researchers examined relationships between the participants' mental health as adolescents and later economic outcomes.

They found that clinically significant psychological distress in adolescence was associated with lower annual participation in the labor force 10 years later, as well as a reduction of $5,658 in annual wages per person. These estimated relationships could be applied by government budget analysts as parameters in existing economic models in order to evaluate the potential benefits of policies for improving adolescent mental health.

To demonstrate how the estimated parameters could be applied, the researchers used them to model the impact of a hypothetical policy that would expand access to preventive mental health care, reaching 10 percent of adolescents who otherwise would have developed psychological distress. They found that, from labor supply impacts alone, such a policy could offer $52 billion dollars in U.S. budget savings over 10 years.

This study's estimated parameters could be applied to help guide real-world policymaking in the U.S. The researchers also outline potential directions for future research to further refine the parameters.

Counts adds, "As the U.S. faces a crisis in adolescent mental health, the need for greater investment has never been more urgent. Previous studies found that investing in mental health early could save money down the line. Our new research finds that, at the scale of the United States economy, improvements in adolescent mental health may bring many billions of dollars of federal budget benefits over ten years, potentially offsetting the costs of policy change that could cover critical services for young people such as integrated care."