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In a nutshell
- Teens who experience significant psychological distress earn $5,700 less annually in their late twenties and accumulate $10,800 less in savings by age 30 compared to their peers
- A program reaching just 10% of at-risk teens could generate $52 billion in federal budget benefits over ten years through increased workforce participation alone
- Current federal investment of $60 million annually in mental health infrastructure falls far short of the $10 billion needed to reach 25% of the adolescent population, despite potential economic returns
WASHINGTON — When mental health struggles hit during the teenage years, the financial aftershocks can reverberate well into adulthood. New research reveals that teens experiencing psychological distress earn about $5,700 less per year in their late twenties and build up roughly $10,800 less in savings by age 30 compared to their peers. These findings come from a study that tracked over 3,300 American teenagers from their high school years into early adulthood.
The study measured psychological distress using a standardized questionnaire called the Mental Health Inventory-5, which asks people about their recent mood, anxiety levels, and emotional wellbeing. Teens who reported significant distress — meaning they frequently experienced feelings of nervousness, depression, or hopelessness — showed markedly different life trajectories a decade later.
This research, published in PLOS Medicine, breaks new ground by presenting its findings in a way that government policy analysts can actually use. While previous studies have shown links between teen mental health and later life outcomes, this is the first to package its results in a format that fits seamlessly into the economic models used to evaluate potential policies. It’s like providing a universal adapter that allows different systems to work together; in this case, connecting mental health research with government budget analysis.
The numbers paint a stark picture: Beyond earning less and saving less, young adults who experienced psychological distress as teens worked about 201 fewer hours per year, equivalent to roughly five weeks of full-time work. They were also 6% less likely to hold a job at all.
The ripple effects extended into education as well. Those who experienced significant distress as teenagers were 9% less likely to pursue any college education and 3% less likely to complete a college degree. This educational gap helps explain why the earnings difference persists over time; with less education often comes fewer job opportunities and lower earning potential.
What makes this study particularly powerful is its examination of potential solutions. The researchers modeled what would happen if the government expanded access to preventive mental health care to reach just 10% of teens who would otherwise develop significant psychological distress. Their analysis suggests such a program could generate $52 billion in federal budget benefits over ten years, simply through increased workforce participation.
The study’s lead author, Nathaniel Counts of The Kennedy Forum, frames the urgency of these findings against today’s youth mental health crisis. While previous research has suggested early mental health investment could save money long-term, Counts notes that this study demonstrates how “improvements in adolescent mental health may bring many billions of dollars of federal budget benefits over ten years, potentially offsetting the costs of policy change that could cover critical services for young people such as integrated care.”
The timing of this research is particularly relevant. Teen mental health has declined substantially in recent years, a trend worsened by the COVID-19 pandemic. Added to this are the increasing pressures from social media, technological change, and economic uncertainty. Without intervention, these challenges could create economic ripples far beyond their immediate emotional impact.
The study highlights a critical oversight in how we evaluate mental health policies. Currently, when the government analyzes the cost of potential mental health programs, it typically doesn’t factor in the long-term economic benefits these programs might generate. It’s like calculating the cost of a college education without considering the higher earnings potential it creates.
For context, in 2023 the federal government invested $60 million annually in integrated mental health care infrastructure. While this might sound substantial, the research suggests that reaching even a quarter of the adolescent population would require an investment of at least $10 billion. However, given the potential economic returns identified in this study, such an investment could essentially pay for itself over time.
Paper Summary
Methodology
The researchers used data from a long-running study called the National Longitudinal Survey of Youth 1997, which followed the same group of teenagers over many years. They focused on teens who were between 15 and 17 years old in 2000, measuring their mental health using a screening tool that asked about feelings of anxiety, depression, and general psychological wellbeing. The researchers then tracked these same individuals a decade later, examining various aspects of their lives including employment, income, education, and health status.
To ensure their findings weren’t just coincidence, the researchers accounted for many other factors that could influence someone’s life outcomes. These included family background (like parent income and education), neighborhood characteristics (such as safety and peer influences), school quality, and academic performance. What makes this study particularly valuable for policy makers is that its results are presented in a way that fits directly into existing government economic models – something previous studies hadn’t managed to achieve.
Results
The financial impact of teenage psychological distress proved substantial. By their late twenties, those who experienced significant distress as teens earned $5,658 less per year and had accumulated $10,833 less in savings by age 30. They also worked 201 fewer hours annually – equivalent to missing about five weeks of full-time work each year – and were 6% less likely to be employed at all.
The study found clear educational impacts too. Those who experienced psychological distress as teenagers were 9% less likely to get any college education and 3% less likely to graduate from college. Importantly, these findings were presented in a format that government analysts can plug directly into their economic models when evaluating potential policies.
Limitations
Like any research, this study had its constraints. Some participants didn’t complete all parts of the survey, leaving gaps in the data. Additionally, since the study tracked outcomes during 2000-2010, the findings might not perfectly reflect today’s economic environment. The fact that many participants entered the workforce during the Great Recession – one of the worst economic downturns in recent history – might have made their struggles more severe than they would be in better economic times. While some participants were siblings living in the same household, additional analysis suggested this had minimal impact on the results.
Discussion and Takeaways
This research does more than just document problems – it provides a framework for evaluating potential solutions. By showing how mental health interventions could generate substantial economic returns, it makes a strong case for increased investment in adolescent mental health services. The study suggests that relatively modest investments in prevention could yield significant economic benefits down the line.
Funding and Disclosures
The researchers conducted this study without specific funding and declared no competing interests, suggesting their findings weren’t influenced by external financial considerations.
Publication Information
This research article, “Psychological distress in adolescence and later economic and health outcomes in the United States population: A retrospective and modeling study,” appeared in PLOS Medicine on January 16, 2025. The research team included experts from The Kennedy Forum, Columbia University, University of Washington, U.S. Department of Health and Human Services, and Harvard T.H. Chan School of Public Health.
