Better mental health linked to stronger local economies, new research shows
New research involving academics from The Productivity Institute (TPI) highlights the associations between population mental health and economic prosperity across England, with particularly strong relationships in regions facing long-standing disadvantage.
A new study analysing nearly 7,000 small areas across England between 2011 and 2019 finds a clear positive association between improvements in mental health and increases in household income.
The findings suggest that better population mental health is linked to stronger local economic performance, reinforcing the importance of wellbeing as a driver of productivity and inclusive growth.
Key findings
The research shows that:
- A one-unit improvement in a local mental health index is associated with a 1.9% increase in gross disposable household income (GDHI) in the following year.
- The relationship between mental health and economic prosperity varies by region, with stronger associations in the North East and North West.
- Estimated gains are higher than the national average in these regions, reflecting their greater potential to benefit from improved mental health outcomes.
- Over the study period (2011–2019), income and mental health disparities persisted across regions, with the North of England consistently experiencing lower incomes and poorer mental health outcomes than London and the South East.
A place-based productivity challenge
The findings highlight the close interaction between mental health and economic performance at the local level.
Regions such as the North East and North West, where both mental health outcomes and household incomes have historically lagged, stand to gain the most from improvements in mental health provision and support.
This reinforces a central theme in TPI’s work: that productivity challenges are deeply place-based, and that improving economic performance requires targeted investment in the underlying drivers of wellbeing and opportunity.
Implications for policy
The research contributes to a growing evidence base showing that investing in mental health is both a public health priority and an economic one.
With demand for mental health services continuing to rise, and national policy increasingly focused on improving access and outcomes, the findings underline the potential role of mental health interventions in supporting:
- Higher household incomes
- Improved labour market participation
- Stronger and more resilient local economies
Research context
The study, titled “Is there an association between mental health and economic prosperity? A longitudinal ecological study in England, 2011–2019”, was conducted by researchers from The University of Manchester, Health Equity North, Newcastle University, and the National Institute for Health and Care Research Applied Research Collaboration Greater Manchester, with involvement from academics from The Productivity Institute.
Researcher insight
Doriane Mignon, lead author and Research Fellow in Population Health, Health Services Research and Primary Care at The University of Manchester, said:
“As the British Government explores approaches that will improve well-being, productivity and growth, it is important that it considers the potential impact of strategic investment in mental health support on the lives of its citizens and communities.”
Dr Luke Munford, Senior Lecturer in Health Economics at The University of Manchester and Academic Co-Director of the NIHR ARC-GM and Health Equity North, said:
“With as many as one in five people experiencing a common mental health condition, the case for improving mental health services across the country is compelling.
“As this study indicates, addressing mental health issues may lead to better outcomes for households. The greatest effects could be felt in northern regions, which have traditionally been most affected by health and economic inequalities.”
Read the full study on the British Medical Journal’s website.
