People suffering from common mental disorders (CMD) such as depression and anxiety are more likely to be economically inactive. Psychological therapies are highly effective at treating CMDs but less is known about their impact on long-term labour market outcomes. Using national treatment programme data in England, NHS Talking Therapies (NHSTT), with unique linkage to administration data on employment and census records, we estimated the causal effects of NHSTT on employment and earnings. Overall, completing treatment led to a maximum average increase of £17 in monthly earnings (year two) and likelihood of paid employment by 1.5 percentage points (year seven). Those 'Not working, seeking work' saw a maximum average increase in pay of £63 per month (year seven) and likelihood of paid employment by 3.1 percentage points (year four). Our findings demonstrate the economic benefits of treating CMDs, and how investing in mental health can impact labour market participation.

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28 January 2025     Paper Number CEPDP2070

Download PDF - The effect of adult psychological therapies on employment and earnings: Evidence from England

This CEP discussion paper is published under the centre's Community Wellbeing programme.