Money Or Mental Health? It’s The Wrong Question (Guest Blog)

Drs. Kerris Cooper and Laura Kudrna discuss the relationships between poverty, mental health and happiness, as well as what impact this topic should have on research and policy. They question whether we can definitively say that income or mental health are more important for happiness because of the interrelationship between income and mental health, as well as the issue of who is not included in the data that are used to make such claims.

Many people want to know whether money makes people happy. The answer to this question has important implications for how individuals live their lives and how societies are structured by policymakers. In Professor Richard Layard’s most recent book with colleagues it has been argued that mental health is much more important for people’s happiness than poverty and that, therefore, treating mental health is where policy solutions should focus rather than focussing on alleviating poverty. We question this proposition by raising two issues: is it possible to separate the effect of mental health from the effect of income on happiness? And to whom are the happiness questions posed in the surveys in which this work is based on?

First, it is important to be clear about the difference between happiness and mental health. Although the word ‘happiness’ is often perceived by the public to be about positive feelings like joy and contentment, it has a broader philosophical meaning situated within the mental state account of human wellbeing. According to this account of wellbeing, people’s lives are going well when they feel and think that they are going well. Mental health is something that impacts happiness, and happiness impacts mental health, but they are not the same construct for many reasons, e.g. mental health problems can be diagnosed by a professional and diagnostic criteria sometimes involve behaviours. Behaviours are not mental states and so this is a departure from a pure mental state account of wellbeing.      

Income and mental health: it’s not a case of ‘either or’…

It is commendable to attempt to provide ‘a bible for policymakers’ and use research so explicitly to try and guide policy solutions. There are also few today who would disagree that advocating for more mental health services is a good thing. However, to pit income and mental health in competition for which is more important for happiness ignores the evidence that mental health is itself associated with income. There is high quality causal evidence from RCTs and natural experiments demonstrating that when income increases, then the symptoms of depression decrease. There is also evidence that mental health can be a mechanism through which income affects other outcomes such as parenting. Of course, the relationship can also run in the opposite direction: mental health can impact income through, for example, the ability to work. To separate income and mental health and treat them as entirely independent factors ignores this interrelationship which makes intuitive sense as well as being borne out in evidence.

The interrelationship between income and mental health has important policy implications. If the government focusses on treating mental health whilst at the same time allowing poverty to increase, this approach is not likely to effectively address mental health problems. This is because mental health is a pathway through which poverty affects a number of other life factors. As such, mental health cannot be addressed in isolation without taking account of people’s economic context. Other critics have suggested that the way The Origins of Happiness is presented ‘lets austerity off the hook’, and advocates for treating the symptoms (poor mental health) rather than the cause of the problem (poverty). It is possible to be concerned about happiness without downplaying the importance of income. For example, in his recent IFS lecture Angus Deaton suggested we should focus on people below the income threshold of $75,000 from which point increased income no longer seems to make a difference to people in the United States according to some measures of happiness.

… but it is a case of ‘for whom…

The interrelationship between income and mental health is not the only reason to be concerned about policies that prioritise treating mental health problems at the expense of poverty. A second major issue is the question of to whom happiness questions are posed. Many happiness studies come from household surveys, including those in The Origins of Happiness. Studies using household surveys are usually discussed as being ‘representative’ samples of some population, such as people living in a particular country. However, they are only representative of households. This means that they usually exclude populations such as people who are homeless and those living in institutions such as care homes and prisons. These are people who are more likely to be socio-economically disadvantaged and are important for our understanding of whether poverty or mental health matter more for people’s happiness.

Some psychological studies do claim to sample people with low incomes specifically. This is a welcome turn from a tradition within academic psychology of using ‘convenience samples’, especially young students. Now, many psychologists employ online recruitment from panels such as Qualtrics, Amazon Turk and Prolific Academic. But online samples are also unlikely to capture the truly disadvantaged, such as those with low literacy or without access to a computer.

When research is conducted about the relationship between income and happiness, therefore, there should be caveats about the sample – especially if an argument that income is only weakly related to happiness is being made. The answer to whether more money can make people happier or not depends on many factors, one important one being where the individual is located in the income distribution. Poverty causes the absence of happiness – which is misery. We should not let research excluding the truly disadvantaged distract us from this fact.

… and we should do something about it

Estimating income and mental health as independent effects ignores the importance of their interrelatedness. Furthermore, some of the most vulnerable members of society are not included in the data that are used to inform policy implications that impact vulnerable people. Using happiness research to justify investing in mental health at the expense of poverty is an over-claim resulting from an over-simplification of the evidence. This is not merely an academic issue. It is irresponsible to downplay the importance of income for happiness in the context of a government that has allowed child poverty, homelessness and food bank usage to increase, while the Child Poverty Unit has been abolished, and the Social Mobility Commission have quit in frustration. We must do more.

Drs Kerris Cooper and Laura Kudrna
London School of Economics and Political Science

This is a guest blog and the views of the authors are not necessarily those of The Equality Trust.