Mental health and productivity at work: Does what you do matter?

an article by Melisa Bubonya (The University of Melbourne, Australia), Deborah A.Cobb-Clark (The University of Sydney, Australia, Institute for the Study of Labor (IZA) and ARC Centre of Excellence for Children and Families over the Life Course, Australia) and Mark Wooden (The University of Melbourne, Australia and Institute for the Study of Labor (IZA)) published in Labour Economics Volume 46 (June 2017)

Highlights

• Poor mental health is associated with both higher absence and presenteeism rates.
• Job conditions influence presenteeism, but only among persons in good mental health.
• The contribution of job control to absence is greater for those in poor mental health.
• Initiatives that reduce job stress offer the most potential to lift productivity.

Abstract
Much of the economic cost of mental illness stems from workers’ reduced productivity. Using nationally representative panel data we analyze the links between mental health and two alternative workplace productivity measures – absenteeism and presenteeism (i.e., lower productivity while attending work) – explicitly allowing these relationships to be moderated by the nature of the job itself.

We find that absence rates are approximately five percent higher among workers who report being in poor mental health. Moreover, job conditions are related to both presenteeism and absenteeism even after accounting for workers’ self-reported mental health status.

Job conditions are relatively more important in understanding diminished productivity at work if workers are in good rather than poor mental health. The effects of job complexity and stress on absenteeism do not depend on workers’ mental health, while job security and control moderate the effect of mental illness on absence days.

JEL Classification: I12, J22, J24

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