Mental Health and the Irish Economy

A long literature has examined the role of  economic factors in promoting well-being. This has been a particularly active area for the last decade or so in Economics (summary of recent workshop we did on this topic with readings etc.,). Lately, a major topic of interest has been the role that mental health plays in producing economic outcomes at individual level. For example, an influential 2011 PNAS paper pointed to dramatic long-run economic effects of early life mental health conditions (see my review paper with one of the authors).  Richard Layard has called mental health the new frontier of labour economics and argued for mass expansion of mental health research and treatments. A big focus of the discussion has been the idea that mental health has been systematically discounted compared to physical health conditions in terms of health funding. Various proposals have been put forward to enhance the profile of mental health service in the UK (the recent speech by Nick Clegg one of most prominent).

A few major points to come from this literature and worthy of wide debate in the Irish context include:

The utility losses (for want of a better phrase) of mental health conditions are enormous even outside of effects on productivity and income (e.g. paper here). The interaction of this with physical conditions is also very important. Chronic pain is one particularly important area that should have greater priority in debates on health care (see Alan Krueger on this here).

Childhood mental health has dramatic effects on later life economic outcomes. There is a strong rationale to increase funding for child mental health research and services.  Many childhood mental health problems are practically ignored for the purpose of policy-making. For example, there exists almost no evidence on the long-run effects of prescribing stimulants to children diagnosed with ADHD with recent papers not exactly painting a glowing account of their usefulness (e.g. paper by Janet Currie here).  If you reflect on it, it really is an odd state of affairs that such important questions are neglected. The role of school mental health services for primary school children and teenagers is another area that is important to debate more given the hugely predictive effect of early mental health on life-long trajectories.

Lord Layard and others have argued for a substantial expansion of talk-therapies and a wider roll-out across society (short article outlining this view here; see also Layard and Clark’s recently released book Thrive). In the context of high rates of unemployment still in Ireland and in particular high rates of youth unemployment, this is worth discussing a lot more in the Irish context. Developing funding streams for large-scale referrals for brief talk-therapies is one of the most concrete suggestions to come from the recent literature.

There is a strong rationale for examining the proportion of health funding allocated to mental health in Ireland. It is widely documented  that mental health services in Ireland are given less priority compared to other countries (e.g. recent report here also O’Shea and Kennelly report).

23 replies on “Mental Health and the Irish Economy”

‘… childhood mental health problems have much larger impacts than do childhood physical health problems on four critical areas of socioeconomic status as an adult: education, weeks worked per year, individual earnings, and family income.’ (Delaney & Smith, 2012)

@Minister Varadker

Percentage of health budget allocated to mental health issues has ‘decreased’ in recent yrs from ~7 to ~5%. The psychological services for ‘teens’ is seriously overloaded – I note in the budget releases [h/t The Bundestag] that more teachers to be hired – hire a good few more for the ‘psychological services’ to 2nd level schools to relieve the pressure …. and note the anomaly for the 16-18 age group. Continue with the straightest bat of the realist centre right …

A few bob extra on Employers’ Social Insurance [presently lowerst in the EU] would provide the readies!

@Liam Delaney

V. useful.

Labour economics does not appear to be an Irish forte!

While politicians and economists should decide the total health budget, based on what the economy can afford, the distribution of that budget between various medical conditions should be determined by trained medical doctors, not by politicians, economists or media commentators, and certainly not by posters here (myself included). When politicians have the final say, resources MAY end up being allocated on the basis of which conditions are ‘politically correct’ to have extra funding, rather than which conditions give ‘the best bang for the buck’ in terms of overall health benefit. Thus, there have been allegations that aids has received disproportionate funding as compared with cancer, because of the political and media clout of the gay lobby. And there have been allegations that female cancers have received disproportionate funding as compared with male cancers, because of the political and media clout of the feminist lobby. I can not verify if these claims are true, but they are frequently made by reputable people and, as long as politicians have the final say, there is always a danger that they will be true.

If Ireland is spending a smaller proportion of its health budget on mental health than other countries, then ipso facto it must be spending a higher proportion of its health budget on physical health than those countries. Its not for me (or anyone else here, unless they are a trained medical doctor), to say if this is right or wrong. If trained medical doctors say the proportions should be revised, then I’ll go along with that, but not if its politicians, economists or media commentators trying to be trendy. I note, however, that Ireland has had one of the biggest falls in mortality rates in Europe in the past two decades. The author of the thread, based as he is in Scotland, will be aware that, whereas in the mid 1990s, mortality rates in Ireland and Scotland were broadly similar (and well above the EU average), today mortality rates in Ireland are 16-18 per cent lower than in Scotland and below the EU average. So, maybe the fact that Ireland spends a higher proportion of its health budget on physical health (and ipso facto a lower proportion on mental health) isn’t that dumb an idea after all. However, as I said, if a trained medical doctor says this conclusion is wrong, I will bow to his superior knowledge. I also note that some countries, the Nordic ones in particular, that spend the highest proportions of their health budgets on mental health also have higher suicide rates than Ireland (Finland in particular).

Of course, one needs to have the utmost sympathy for anyone suffering from any health condition and wish that there was unlimited funding for all such conditions. But, tragically, in the real world that is not possible and (often harsh) decisions have to be made about the best allocation of resources. My only point is that these decisions should be made by trained medical doctors and not by politicians, economists or media commentators. Socialist utopians will, of course, claim that this necessity (to make decisions about the best best allocation of resources) is merely a symptom of the evil capitalist system and will be eliminated under socialism. I note, however, that the pre-1990 socialist utopias of Eastern Europe all had mortality rates and suicide rates at the time that were over twice those of Western Europe (Ireland included). They’ve caught up a bit since. But, even today mortality and suicide rates in countries like Latvia, Lithuania, Poland, Hungary, Romania, Bulgaria etc are far higher than in countries like Ireland, Greece, Portugal, Belgium, Spain and Italy.


You say:

“The percentage of health budget allocated to mental health issues has ‘decreased’ in recent yrs from ~7 to ~5%.”

But, if true, it follows automatically that:

“The percentage of health budget allocated to physical health issues has ‘increased’ in recent yrs from ~93 to ~95%.”

I am not saying which is best. My point is that only trained medical doctors should decide the balance as between physical and mental. Not Enda Kenny, not Leo Varadakar, not me, not you (unless you are a trained medical doctor). I note, however, that mortality rates from physical health conditions have fallen dramatically in Ireland in recent years, while there has been no corresponding increase in suicide deaths. So, maybe the change in the proportions has actually had a net benefit. I am not saying this is definitely the case, but that only trained medical doctors can decide.


Not exactly like for like. Finland has a geographical disadvantage when it comes to suicide. Long dark winters are tough on people.


Medical doctors, as with other health professionals, can decide very little without relevant research to inform such decisions.

The last medical doctor who filled the Health Minister position, Dr. Reilly, must have read very little research … X-Minister Harney, in a FF/pd Gov, made her decisons based on the worst of neoliberalism and the ‘purrfect mawrket hypothesis’ (sic).

Dr. Delaney spent some time in UCD; why he was not offered a decent Professorship is beyond me ….

Having only “trained medical doctors” influence allocation of resources between different branches of medicine is analogous to having only trained sports professionals decide an allocations of fixed total spending between the different branches of sport.

@That’s Legal

True. Presumably that’s why Mediterraenean countries have low suicide rates. But, some countries like France have better weather than Ireland, much-lauded mental health services, and still have higher suicide rates.


“Medical doctors, as with other health professionals, can decide very little without relevant research to inform such decisions.”

I totally agree. However, the research should come from trained medical people, not from other politicians, not from the media, and not from lobby groups. That’s my point.

It is perfectly understandable that those suffering from a particular health condition and their families should want more resources devoted to that condition, even at the expense of less resources devoted to other health conditions. That’s human nature. If I suffered from a serious health condition (and maybe I will one day). I’d
want lots more resources devoted to that condition. But, government decisions can’t be based on that. In particular, before reducing the proportion of the health budget spent on physical health and increasing the proportion spent on mental health, the government would need to have commissioned proper research to determine if it is overall beneficial and not do it because the mental health lobby (however worthy and well-intentioned) has more political and media clout than the lobbys for various physical conditions. For example, there have been repeated media stories in recent years claiming that Ireland’s suicide rate has been rocketing. In fact, it has been falling (although with some year-to-year volatility). As I said earlier, I am not against a change in the balance between physical health and mental health allocations if its based on proper research by trained medical personnel, rather than an article in the Irish Times making false claims about the suicide rate increasing. Also, to repeat that I’m talking here only about the proportions (the author of the thread wrote ‘There is a strong rationale for examining the proportion of health funding allocated to mental health in Ireland’). I’m not against increasing the total allocation for both physical and mental health as the economy improves and I’m in favour of spending on health over, say, spending on armaments, royal families or constitutional conventions. But, if you are talking about changing the proportions (which the author is), you need to realise you are reducing one as much as increasing the other and this should only be done if research shows the net effect will be beneficial.

Where’s the evidence of the cost-effectiveness at the margin of public spending on health, let alone on ‘mental health’?


‘… if research shows the net effect will be beneficial.

Precisely what Delaney & Smith (2012), and others noted in the very extensive opening thread, have demonstrated.

You’re a good math/stat head, and a juggler of note, but methinks you might benefit from Research101.


I can’t see anywhere that they have researched the effect of reducing the percentage of the health budget spent on physical health. Simply saying that mental health issues cause problems in young people and that these can be reduced by increased spending on mental health is not the same as saying that the percentages should be changed. CF, leukaemia, childhood cancers also cause problems in young people. Before reducing the percentage of the health budget spent on these, the government would need to be pretty sure of its ground. No doubt the victor in Dublin South-West will say that the percentagess of the health budget spent on physical and mental health should both be increased, just as I’m sure he believes everyone should have an above-average income. But, I’m operating under the simplistic assumption that the percentages of the health budget spent on physical and mental health add up to 100, and not 150.

There are two issues. One is the total health budget. If the percentages for physical and mental health are kept the same, then an increase in the total health budget (as the economy improves) will result in increased spending on both physical health and mental health. Nothing wrong with that. It would be great if it happens. But, that’s not what the thread author is on about.

The thread author specifically proposes:

“There is a strong rationale for examining the proportion of health funding allocated to mental health in Ireland.”

Note the word ‘proportion’.

So, if the proportion spent on mental health goes up, then ipso facto the proportion spent on physical health goes down by an equal amount. No way out of that. I want to see research on the malevolent effect on physical health outcomes of this as much as on the beneficial effect on mental health outcomes. Then the two can be compared and a decision made as to whether there is a net benefit. If the conclusion is that there is a net benefit, I’ll go along with it. In 2012 there were 14,000 fewer deaths in Ireland than in 1996 when adjusted for population ageing. The ‘age-standardised’ death rate (as its called) fell by one-third. If, say, total health spending had been the same, but 2% of it switched from physical health conditions to mental health conditions, it is perfectly possible that there would have been only 13,000 fewer deaths in 2012 than in 1996 (i.e. 1,000 more than actually occurred), but 50 fewer suicides. That’s conjecture, of course. But, I’m saying I want to see research quantifying the loss in one area against the gain in the other area, before going along with the author’s proposal.

Mental health is a cinderella service in Ireland. Like the rest of health services it is still dominated by delivery of rationed amounts of treatments from institutional settings, rather than more therapeutically effective and frequently lower cost community-based treatments. The reason for this is mostly to do with the political power of hospitals and the comfort and convenience of the administrators and professionals who run them.

No research whatever is required to establish the drivers of healthcare provision, nor is there any reasonable doubt about the type and composition of the services needed to meet the needs of users of services.

Obviously suspicion of the motives of economists, existence of unhelpful turf wars, or power relationships within the practice of economics would only ever properly be voiced by those within the profession 🙂


I am a member of a medical family but am not a medic. Two of my brothers have practiced as consultant medics in Ireland and my father made a huge contribution to shutting many of the old asylums here.
I myself have done enough public policy consulting for the Irish government to know that a fundamental problem is the artificial fragmentation of services for citizens into hundreds of discrete types of support, scattered across a plethora of central and local goverment institutions, generally on a rationed basis and with little or no coordination. It generates high levels of activity with poor levels of service and tends to disenfranchise service users from managing their own care.
There is no mystery about why the mental health services evolved to be institution-centric in this country or why it has to a significant extent remained so up to the present day.


‘…the information on Ireland shows that austerity measures cut total funding of mental health services from €937m in 2006 to €733m in 2013. Another €25m was invested in hiring extra staff.

However, overall mental health spending as a percentage of the total health budget dropped from 7.2pc to 5.3pc over the same years.’

Of course, abstract number tells us absolutely nothing about the contours of the Irish mental health landscape, how much of it has been explored or indeed understood, or how financial, human & technological resources are allocated.

It is reasonably plausible to strongly suggest, based on the research evidence presented above by Liam Delaney, that identification during the first score of years, and action, has probable psychological, social and economic benefits.

The only question that remains is: How?


Using reported suicides as a measure of mental health care is weak. I’m sure there were more suicides reported in France during the 1850s too and I doubt the people suffering the famine had great mental health.

I don’t know what mental health care is like in other countries. I do have first hand experience here though. As I suffer from a type of OCD.
My opinion is that the system is extremely disjointed, understaffed, particularly on the psychologist side and over reliant on medication. So in absolute terms I feel it could do with more resources.

As I was young, broke and renting in various locations throughout Dublin during the initial attempts to diagnosis, I have experience of the public system in 2 regions first hand. Dublin is devided in to HSE regions. If one has an issue, one either presents at A&E or a GP.

One is then refered to a Consultant psychiatrist in your region, where you’re an out patient, based on your address not your GPs. He/she meets weekly and decides the priority of each referral. Mine was a month and I presented to the GP in a pretty bad, borderline suicidal state. While waiting one has the option of showing up in A&E to see the on call ‘consultant’. Not worth your while really, I tried that.

Then the consultants team, comprising of trainee/junior consultants meet you. They chat with you about what has gone on. Ask standardized questions. After 15 minutes, they go have a 1 minute chat with the senior consultant, come back and give you a diagnosis, a prescription, another appointment and add your name to a (in my case) 9 month waiting list for a psychologist. This process repeats, until they find the best meds, through tial/error and you’re finished your sessions with the Psychologist at which point you may or may not be weened of the meds. Then you’re back in the care of your GP, if you have one, if not you might return once/twice a year.

@Thats Legal

“So in absolute terms I feel it could do with more resources.”

Glad you seem to have made a great recovery. You put up a very good case for more resources for mental health. But, you could say the same about about lots of conditions, in fact nearly all conditions, both physical and mental. I am in no position to disagree with you, since I have never had any serious medical complaint. I only have one relative with a serious medical complaint, a cousin who was injured in The Troubles in Belfast in 1992, suffered severe physical brain damaged and has been in a care home since and will be for the rest of his life (he’s 50 now).

As well as him., I am sure CF sufferers, leukaemia sufferers, those waiting for a heart op, those on kidney dialysis, epileptics, diabetics, stroke sufferers, those suffering from Alzheimer’s, those with chronic bronchitis, breast cancer sufferers, lung cancer sufferers, those suffering brain damage from car accidents etc etc could put up a good case for more resources. Maybe we’ll soon have to add ebola sufferers to the list. Hope not. All of them are highly deserving, as is mental health.

I am certainly not going to express here an opinion as to which of these are more deserving than others to be prioritised for available resources. My point is that I don’t trust politicians, media, economists or any non-medical people to make the

The harsh reality is that, with the rapid ageing of population that is occurring in all Western countries, demand for medical resources is outstripping what it is possible to supply. Therefore, harsh decisions have to be made about priorities. Of course, the situation could be greatly eased if every man sloped off and died at 66 like they did 50 years ago. That was the life expectancy for men then. Today its 80. If they did that, it would give me just one more Christmas, so the idea doesn’t exactly appeal to me. Assuming most men think similarly and would like to live to 90, and with modern medical developments, are far more able to do so than at any time in history, I’m afraid that health resources are going to be stretched for every condition. That is true of every country, not just Ireland. That’s the harsh reality of life. There is no point media commentators or people in general blaming governments for it. If anyone advocates an increase in the proportion allocated to one condition, they need to accept that this means a decrease in the proportion allocated to other conditions. So, if the proportion allocated to mental health increases from 5.3% to 7.2% as suggested, that means the proportion allocated to physical conditions, such as those listed above, goes down from 94.7% to 92.8%. I am not necessarily against this, just that it needs to be spelled out and the gain in one area quantified against the loss in another area. The problem can, of course, be eased to some extent, but not eliminated, by growing the economy as fast as possible to provide more resources.

With regard to the budget for each condition being spent efficiently, I have no reason to disbelieve what you and Tony Owens say about it not being. All I’ll say is that the Republic of Ireland has a higher life expectancy now than Northern Ireland, it has a lower suicide rate than Northern ireland, and surveys like SLAN indicate fewer people suffering from ill-health than in Northern Ireland.


Thanks. Yip, I’m 99%. I’ll have that monkey on my back forever mind, the trick being to manage it so it doesn’t turn in to an 800lb Gorilla.

I understood and don’t disagree with your point on proportion. Fortunately I am unaware of the process or care provided in any of the other conditions you cite. This being the only condition I’ve suffered. Perhaps each condition requires equally more resources. Perhaps each could spend/organize their resources equally better. I don’t know the answer. My, biased suspicion is that mental health is easier to overlook.

There is still a lot of secrecy and ignorance around mental health in Ireland with a lot of sufferers not known to the medical care providers. Many suicides occur without any contact with the medical system.

Some of the care is top class but it really depends on individuals at local level.
Psychiatry can be very hit and miss as well. They don’t know how the brain works. Nobody does, really.

You are right when you say female health health issues get more funding than others.
What I find very interesting is that Breast Cancer fund raising campaigns around the world have raised billions over the past fifty years. The results are surprising, an increase in early detection rates (Mammograms) but barely distinguishable up ticks in 3 and 5 year survival rates.
In other words narrowly focused cancer research is a waste of funds. Back to basics at the molecular level would get better results but lacks fundraising sexiness.

To say that the Finns have a higher suicide rate than the Irish is to ignore the obvious. In Ireland suicide is socially unacceptable and there is great pressure for Gardai and Doctors to lean toward acceptable explanations. Paddy did not hang himself from the rafters in the cow shed, he became entangled in ropes and fell out of the hay loft, tragic accident. We have to keep in mind the emotions of the new widow and children and the family reputation.
The destructive self medication that goes on in Ireland is indicative of serious mental health problems in the population at large. An alcoholism rate double that of most countries is indicative of something that is not good.

@Mickey Hickey

Might I suggest you go on a course that teaches how to analyse statistics as you clearly lack that talent at present.

All deaths in Ireland are categorised by international standard, as are those in all other developed countries. One of the categories is ‘deaths from external causes’. This category is divided into sub-categories, of which the main ones are (a) deaths from accident (b) deaths from homicide (c) deaths from intentional self-harm (suicide) (4) deaths from unknown cause (usually where it can not be decided if it was accident or suicide).

If your theory was true and deaths in Ireland that belonged to category (c) were being put in categories (a) and (d) so as not to distress relatives, then you’d expect categories (a) and (c) to be higher in Ireland than elsewhere. In fact, they are not. The total number of deaths from external causes (mainly categories (a), (b), (c) and (d)) is much lower in Ireland than in Finland.

Categories in Ireland are fluid as anyone who has lived there should know. International standards are for foreigners. I know of three cases personally, one in Dublin and two in Kerry where the right thing by Irish standards was done.

We did not gain the notoriety of having the biggest housing bust in Europe by rigorously gathering and analysing statistics. As for analysis, have you heard of Irish political jokes.

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