Mental health, a missing piece in Latin America’s job agenda

Poor mental health is one of the leading causes of disability in Latin America and the Caribbean, affecting one in four people at some point in their lives. The World Health Organization estimates that depression and anxiety alone cost the global economy $1 trillion annually in lost productivity.

For Latin America and the Caribbean, where economies are struggling to integrate millions of young adults into the labor market, the opportunity cost of neglecting investments in mental health is immense. Investing in mental health is not only a matter of social justice and human development: it is also an economic strategy. It creates jobs, strengthens the workforce, and improves private sector competitiveness. Three major opportunities show us how investing in mental health is also part of the job’s agenda in the region.

• Prioritizing job creation in primary health care and community care to improve access to mental health services

Investment in mental health generates direct employment, especially in primary health care (PHC) and community-based services. Most LAC countries face a shortage of specialized mental health providers: on average, there are fewer than two psychiatrists per 100,000 people, compared with over 12 in high-income countries. Primary care physicians, community health workers, nurses, and social workers trained in evidence-based psychosocial interventions could close this gap and bring support that is culturally appropriate and accessible.

Only 20–30% of people with common mental disorders in LAC receive the care they need.Expanding mental health in PHC and community-based services would not only close this gap but also reduce health costs by detecting problems earlier and preventing chronic disease. Thus, scaling up mental health services is both a health and employment strategy.

• Unlocking youth potential: Mental health and labor market participation

Mental health conditions frequently develop early in life, with around half appearing before the age of 18. However, many health and social systems do not provide adequate support to deal with these conditions. Consequently, many children and adolescents experience mental health challenges that can impact their academic performance (and their ability to stay engaged in school) and lead to limited participation in higher education, unemployment, and unstable or low-productivity employment. Notably, the region has a high percentage of young people not in employment, education, or training (NEETs): 28.7%. Untreated depression, anxiety, or substance use disorders often prevent these youth from joining the labor market and keeping jobs.

The numbers are compelling: globally, 12 billion workdays are lost every year to depression and anxiety. For LAC economies, this translates into millions of young adults whose potential contributions to GDP are left untapped. By addressing mental health early, LAC countries can turn a looming demographic challenge into a demographic dividend. Targeted investments in school-based programs, community youth centers, and digital mental health platforms can help this generation participate fully in the labor force.

• Private sector innovation: investing in mental health in the workplace

The private sector has a vital role to play. Mental health is not solely a public health issue; it is increasingly a core concern for private sector competitiveness, talent retention, and sustainability. As companies in the region confront rising pressures for productivity gains, innovative workplace mental health interventions driven by an organizational culture that values employees’ well-being are gaining traction.

      Why it matters for business:

• Absenteeism, presenteeism, and turnover: Workers experiencing poor mental health often miss work (absenteeism), underperform while present (presenteeism), or leave jobs prematurely—costing firms in lost output and recruitment. For instance, in Colombia, a 2017 study found that about 70% of patients with major depressive disorder experienced absenteeism, while nearly all faced presenteeism. On average, each patient lost 43 hours monthly to absenteeism and 51 hours to presenteeism. Productivity losses in Colombia alone were valued at US $840 million in 2015.
• Well-being as a competitive advantage: In tight labor markets, employees increasingly expect holistic well-being support as part of compensation. Firms that lead to mental health may attract high performers, reduce burnout, and build healthier cultures.

Innovations by private firms to improve employees’ wellbeing not only improve employee mental health outcomes and wellbeing but also generate a nascent market for mental health tech, coaching services, platform development, and occupational health consultancies, all driving more job creation.

Toward a Jobs-Driven Agenda for Mental Health

To unlock this potential, countries in the region could act on five priorities:

1. Shift resources from psychiatric hospitals toward PHC and community-based care.
2. Expand PHC workers with increased capacities and roles to provide affordable, accessible and timely mental health care.
3. Embed mental health in youth programs: Include psychosocial support within schools and pair it with vocational training, internships, and job matching.
4. Engage the private sector: Incentivize firms to adopt and scale mental health programs that support productivity and innovation.
5. Scale innovation and digital tools: Leverage telehealth and digital platforms to extend services into underserved areas.

In LAC, millions of youths remain disconnected from work, health systems face severe workforce shortages, and companies struggle with productivity slowdowns. Investing in mental health is not a side project—it is a jobs agenda, a growth strategy, and a pathway to sustainable, inclusive development—and a priority the World Bank Group supports through its knowledge and financing across the region. With the right policies and partnerships, unmet mental health needs can be transformed into employment, productivity, and hope.

Source: blogs.worldbank.org