Counting the true cost of childhood psychological problems in adult life

16 March 2015

The long-term impact of poor childhood mental health is believed to be costing the UK a total of £550 billion in lost earnings.

According to new research from the UCL Institute of Education (IOE), the Institute for Fiscal Studies (IFS) and the Rand Corporation, people who experience psychological health problems in childhood will lose more than £300,000 in income, on average, during their lives.

The researchers estimate that there are 1.8 million households (4.3m people) that have been affected by mental health issues during childhood.

The study points out that adults who struggled with psychological problems as children tend to work fewer hours and earn less money, and are more likely to experience unemployment. They are also more likely to marry partners who earn less, if they marry at all, and their quality of life often does not improve as they get older.

At 23 they earn 20 per cent less than those who have not experienced childhood psychological problems. At 33 they are 24 per cent worse off, and at 50 they earn almost a third less (30%).

The researchers analysed information gathered on 17,000 members of the National Child Development Study between 1958 and 2008. They reviewed data from physical and psychological medical examinations and surveys, as well as information on adult earnings, employment, education and relationship status.

Dr James P. Smith, Chair in Labour Markets and Demographic Studies at the Rand Corporation, will tell the Centre for Longitudinal Studies conference in London today (March 16), that the long-term impact of mental health problems in childhood far outweighs the effect of even poor physical health on family income.

“In both the UK and US, the total economic costs of psychological health problems in childhood are much larger than physical health problems,” he says. At age 42, for example, UK adults who experienced childhood psychological problems earn almost a third less, on average, than those who had a major physical problem in their youth.

Dr Smith also acknowledges that childhood psychological issues are associated with other types of cost that are even more difficult to measure. “Although we have calculated the costs from a purely economic perspective, we have not begun to count the psychological and physical costs to the individuals, and their families and friends. Our research underestimates the total damage being done.”

Childhood psychological health was assessed by whether children had received any psychological or psychiatric treatment, or had been diagnosed with moderate or severe problems by a psychiatrist.

Dr Smith and his UK colleagues also studied the results of assessments involving doctors and parents which measured children’s conduct, hyperactivity, emotional problems and social engagement.

In this part of their analysis the researchers also drew on data gathered by two other studies – the 1970 British Cohort Study and the Millennium Cohort Study.

They found that children who had a mother with mental health problems were more than twice as likely (26%) to experience psychological difficulties as those who had a father with mental health issues (12%).

Those from the lowest income families were four times more likely (16%) to display psychological problems than children from the richest families (4%). Sixty per cent of children in the lowest income families, who had a mental health problem, had not seen a psychologist.

“In many cases, this is a family issue and not simply a child issue. So, treatments for the child only are often not enough,” Dr Smith explains. “However, there should be a concerted effort to identify these issues earlier in childhood, and governments around the world should be investing far more heavily in identifying therapies which work.

“This could hugely improve many people’s quality of life. The pound and dollar returns could be enormous too.”

Further information:

Ryan Bradshaw
07952 910 359

David Budge
020 7911 5349

Notes for editors:

  1. Dr Smith, who is an International Research Fellow at the IFS, will be delivering the keynote lecture today at the CLS Cohort Studies Research Conference in Mary Ward House, Tavistock Place, London WC1H 9SN. The two-day conference is showcasing research using cohort data and will cover a broad range of themes relating to the life course, such as health and wellbeing, child development, education and social mobility.
  2. Dr Smith conducted the research with Professor Alissa Goodman, acting director of CLS, and Dr Elaine Kelly and Robert Joyce, of the IFS.
  3. Using data from the 1958 National Child Development Study the researchers estimate that the historical working life losses in earnings for those born in 1958 would be £215,000. The researchers also consider the case of a 23-year-old entering the British labour market in 2008, and estimate that their average lifetime family income loss will be £388,000. The researchers find the average between £215,000 and £388,000, which is £301,500. They estimate that 6.8% of 26.8 million households are affected by childhood psychological problems to arrive at the final figure of £550 billion for total loss in earnings. (£301,500 x 0.068 x 26.8 million = £550 billion).
  4. The National Child Development Study (NCDS) is following more than 17,000 people born in England, Scotland and Wales in a single week in March 1958. Since the birth survey in that year, there have been nine further surveys of the cohort members at ages 7, 11, 16, 23, 33, 42, 46, 50 and 55. The next survey is due to take place in 2018 when the cohort members will be aged 60.
  5. The 1970 British Cohort Study (BCS70) is following the lives of more than 17,000 people born in England, Scotland and Wales in a single week of 1970. Since the birth survey in 1970, there have been eight further surveys of all cohort members at ages 5, 10, 16, 26, 30, 34, 38 and 42. The age 46 survey is due to take place in 2016. Over the course of cohort members’ lives, BCS70 has collected information on health, physical, educational and social development, and economic circumstances, among other factors.
  6. The Millennium Cohort Study is following children born in the UK between September 2000 and January 2002. The five surveys of cohort members conducted so far – at ages 9 months and 3, 5, 7 and 11 years – have built up a uniquely detailed portrait of the children of the new century. The study has collected information on diverse aspects of their lives, including behaviour, cognitive development, health, schooling, housing and parents’ employment and education.
  7. The 1958 National Child Development Study, the 1970 British Cohort Study, and Millennium Cohort Study are managed by the Centre for Longitudinal Studies (CLS), which is based at the Department of Quantitative Social Science, UCL Institute of Education. Further information available at
  8. The studies are funded by the Economic and Social Research Council (ESRC). The ESRC funds research into the big social and economic questions facing us today. It also develops and trains the UK’s future social scientists. Its research informs public policies and helps make businesses, voluntary bodies and other organisations more effective. The ESRC is an independent organisation, established by Royal Charter in 1965, and funded mainly by the Government.
  9. The UCL Institute of Education is a world-leader specialising in education and the social sciences. Founded in 1902, the Institute currently has more than 7,000 students and 800 staff. In the 2014 QS World University Rankings, the Institute was ranked number one for education worldwide. It was shortlisted in the ‘University of the Year’ category of the 2014 Times Higher Education (THE) awards. In January 2014, the Institute was recognised by Ofsted for its ‘outstanding’ initial teacher training across primary, secondary and further education. In the most recent Research Excellence Framework, 94% of our research was judged to be world class. On 2 December 2014, the Institute became a single-faculty school of UCL, called the UCL Institute of Education.
  10. Founded in 1826, UCL was the first English university established after Oxford and Cambridge, the first to admit students regardless of race, class, religion or gender, and the first to provide systematic teaching of law, architecture and medicine. We are among the world’s top universities, as reflected by performance in a range of international rankings and tables. UCL currently has over 35,000 students from 150 countries and over 11,000 employees. Our annual income is over £1bn.
  11. The Rand Corporation is a non-profit institution that helps improve policy and decision making through research and analysis. Rand’s research spans issues such as energy, education, labour markets, health, justice, the environment, and international and military affairs.

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