Psychotherapy is good for mental health, but it can be very expensive too. As economists we try to carefully model and evaluate the monetary effects of different actions and policies. So, for our recent study we decided to use our methodologies to look into psychotherapy, and work out how it can affect labour income.

We analysed British Household Panel Survey (BHPS) data collected between 1995 and 2008. This survey observes the characteristics and decisions of 2,943 men and 5,064 women over time. The participants are randomly selected so that they statistically represent a much larger UK population. Using this information, we looked both at the effect of psychotherapy on mental health (measured using the general health questionnaire, which is used to identify common psychiatric conditions) and income. The results are clear and robust: psychotherapy helps people improve not only their future mental health, but also their future income.

However, when looking at the data it soon became clear that results would differ according to gender. In fact, it turns out that men benefit significantly more economically than women from psychotherapy.

The BHPS data shows that men who reported having had stress and mental problems, and consulting a psychotherapist, experienced an income increase of 13% in the subsequent year. For women the income increase was only 8%. Though different, the boost is substantial for both genders and reflects an increase in productivity resulting from psychotherapy, with an associated reduction of poverty. Needless to say, in our analysis we filtered out the effect of several other factors affecting income – such as education, children, marital status, type of occupation, age, and more – to find a direct link between income and therapy.

Looking deeper into how and why the results vary by gender, we saw that even with the same level of mental health, women seek help more often than men. In the 13 years of data we examined, an average of 23% of women went into therapy at some point, compared to 15% of men. According to our data, consulting a psychotherapist helps women nearly twice as much as men in terms of mental health (1.2 points versus .5 points on the 36 notch general health questionnaire scale). The logical conclusion of that would be that women benefit more from psychotherapy, but this is not so when looking at income.

The 13% and 8% estimations can also be used to calculate a gender wage gap decomposition. A decomposition is used to explain how factors affect the difference in earnings between men and women. Ultimately here the decomposition shows that psychotherapy accounts for 2% of the 5% difference between men and women’s boost in earnings – even though more women than men seek treatment. To understand why this is so we need to look beyond economics and into psychology: gender discrimination in the workplace is highly correlated with poor mental health. If part of the reason why women suffer from low mental health is due to hostile work environments, then improving their mental health will not have the same effect as for men. Personal psychotherapy cannot solve the problems of a discriminatory workplace.

But our findings don’t mean that anyone should rush out to pay for therapy in the hopes of an income boost. Increasing the provision of free or affordable mental health care is paramount to obtaining a healthy and productive society. A 13% and 8% increase in income per capita is well worth the cost. What’s more, stigmatising social norms and gender workplace discrimination are still huge obstacles to obtain a healthier society that need to be properly addressed. Several steps have been taken by the UK in recent years – including the government’s Five Year Forward View, recommendations for the overhaul of different areas of the NHS, including mental health – but a lot more can be done to remove the stigma, and increase and improve mental health services.