Getting stuck in the blues – on the persistence of depression and anxiety

With 10% of the population in the Western world affected, depression and anxiety are two major health disorders. While the social and economic costs of mental health problems, e.g. less successful labor market careers and high health care costs, are widely recognized, much less is known about their persistence. A new IZA discussion paper by John Roy and Stefanie Schurer examines why symptoms of depression and anxiety are so chronic in nature. The authors hypothesize that a first-time experience of an episode of depression or anxiety will alter an individual’s way of thinking and behavior which causes the individual to get trapped in a vicious cycle of continuously experiencing such symptoms in the future. Using Australian data, the study indeed finds that experiencing an episode of depression or anxiety doubles the probability of experiencing such an episode again in the next year. Low household income is a major risk factor in this “state dependence”, as it increases this probability by almost 500%. It immediately follows that treating first episodes of depression and anxiety is crucial in averting the excessive long-term economic and social costs associated with chronic mental health problems. Hence, the authors suggest that public policy makers in Australia should increase the hours of free counseling services provided to individuals suffering from depression or anxiety (currently 10 per year), and should target in particular low-income individuals.