The relationship between mental health and financial health is direct. People with mental health problems are three and a half times more likely to have debt that is causing them budget problems. As an example, in England alone, more than 100,000 people with debt problems attempt suicide each year.
Despite such an obvious relationship, financial difficulties are often overlooked as a contributing factor to mental health problems, and vice versa. However, it is clear that one problem feeds the other, creating an escalating spiral of financial hardship and worsening mental health.
This is explained by the economist Emilio Hungary, author of the first report A healthy mind in a healthy pocket: Policy recommendations to improve financial and mental health in the Dominican Republic, an initiative of the Superintendency of Banks (SB) regarding the month of mental health.
Research reveals that mental disorders such as depression and anxiety are highly prevalent in the population globally. On average, at any one time, 15% of the working-age population is affected by these disorders. Furthermore, around 56% of people who report having depression do not receive adequate treatment at any time.
Similarly, it is estimated that each year the direct cost of the lack of mental health care is between 3.5% and 4% of the world’s gross domestic product (GDP).
The World Health Organization (WHO) describes mental health as “a state of well-being in which the person realizes his capacities and is able to cope with the normal stresses of life, to work productively and to contribute to his community”.
Dominican Republic
By 2019, the factor “violence and suicide” represented the eighth place in the causes of death in the country. Likewise, mental disorders ranked number five in terms of loss of disability-adjusted life years (DALYs), a metric widely used in cost-effectiveness studies in health issues.
These problems have been in constant growth in recent decades: from 1990 to 2019, it is observed that the growth of the effect of mental disorders in the loss of years of life is 71.4% in the loss of years of life for Dominicans .
The anxiety it is the most prevalent mental disorder in the Dominican Republic (5.7%). However, as a percentage of all DALYs, the depression It exceeds it with 2.1% of average annual DALYs in the country.
According to the Survey of Economic and Financial Culture (2014), more than 60% of households annually have some circumstance in which income does not cover expenses.
This indicator is considerably high regardless of the socioeconomic level of the families, exceeding 70% of the lowest-income households and 44% of the highest-income families.
But what do these households do to cover their expenses when their income is not enough? The vast majority (two out of three) choose get into debt and 61% try to reduce their expenses. Only 19% of households withdrew money from their savings, which is consistent with the low rate of households with funds for emergencies.
It is even more worrying that among those who get into debt, less than 25% do so through formal financial instruments to meet these needs, since in many cases informal systems can be much more expensive.
The Economic and Financial Culture Survey indicates that 51% of the lowest-income households could only stay afloat for a week if they lost one of their main sources of income, and more than 83% of the lowest-income households lows could not have been sustained for more than a month.
In this context, the COVID-19 pandemic presented a significant financial health challenge, the effects of which were mitigated by social assistance policies.
Study
For the preparation of the report A healthy mind in a healthy pocket: Policy recommendations to improve financial and mental health in the Dominican Republic, Hungary made use of the study and analysis of more than 60 national and international publications on mental health, financial health and good practices of public policies in these areas.
Likewise, it analyzed databases of the Central Bank of the Dominican Republic, the SB, and Dominican financial entities, and conducted more than 15 interviews with mental health experts and public policy makers on health and mental health issues in the country. .
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