Tackling mental ill-health of the working-age population has become a key issue for labour market and social policies in many OECD countries. It is an issue that has been neglected for too long despite creating very high and increasing costs to people and society at large. OECD governments increasingly recognise that policy has a major role to play in improving the employment opportunities for people with mental ill-health, including very young people; helping those employed but struggling in their jobs; and avoiding long-term sickness and disability caused by a mental disorder.

Throughout the OECD, mental ill-health is increasingly recognised as a problem for social and labour market policy; a problem that is creating significant costs for people, employers and the economy at large by lowering employment, raising unemployment and generating productivity losses. The Swedish Government has embarked on various policies and strategies that seek to combat the negative consequences of mental illhealth. Nonetheless, a number of barriers persist, including insufficient resources, lack of awareness and tools to identify and, hence, help those with a mental disorder. Above all, it is important to recognise that problems related to mental ill-health cannot be solved without strong co-ordination between policy areas and institutions. A systematic and sustained effort is required across different government departments (including, Education, Health, Social Insurance and Employment) and workplaces to improve labour market inclusion of people with a mental illness and prevent large social and economic losses incurred by the Swedish society as a whole.

Mental ill-health is a fast-growing problem which costs the Swedish economy more than EUR 7 billion every year through lost productivity, social benefits and healthcare. With mental ill-health accounting for 60% of all new disability claims, it has become the leading cause of labour market exclusion among the working-age population in Sweden; and especially among young people. People with mental disorders are poorly integrated in the labour market. Many of those who are employed struggle in their jobs and those who become unemployed receive inadequate support and have poor chances of reintegrating in the labour market.

This chapter discusses the current labour market performance of people with a mental disorder in terms of their employment and unemployment situation, with a view on sickness absence and reduced productivity of those working. Building on the findings in the recently published OECD report “Sick on the Job?”, it highlights the key challenges ahead, such as the high share of people on different social benefits who suffer from a mental health condition. The chapter also provides a description and an assessment of the three main systems catering for people with mental illness: social protection and income support, the education system, and health care.

The purpose of this chapter is twofold. First, it assesses whether the school system can adequately identify and manage mental health problems of children and youth. Second, it examines the role of transition services offered e.g. by the public employment service and local employment services to help vulnerable youth enter the labour market. It discusses strategies to prevent mental health problems in schools and the effectiveness of school health services in dealing with mental disorders. It reviews policies directed at identifying problems among early school leavers and young adults who are not in education and not in employment and who are generally at a greater risk of developing mental disorders. The chapter also examines the employment programmes to boost labour market demand for vulnerable youth and addresses the main problems in the disability benefit system for young people.

This chapter looks at the role of employers who are ideally placed to help people already in the workforce to deal with mental health problems and retain their jobs. It first discusses the impact of psychosocial work environment factors on stress and mental health and various workplace practices aimed at preventing mental health problems from arising in the first place. It then looks at job retention responses by employers; additional needs of employers in this regard; and gaps in service provision. Finally, it reviews employer incentives to prevent sickness absence more generally and provision of special support for those with a mental disorder returning to work after a period of sickness absence. The chapter also pays attention to the role of stigma and the potential impact of employment protection legislation on hiring persons with a mental disorder.

This chapter discusses how the current welfare system caters for persons with mental health problems and especially, whether the various measures and support the system offers ensure both a speedy return to work and adequate income security. It pays particular attention to the outcomes of recent sickness reforms for different population groups, namely those with a mental disorder and discusses the potential challenges still remaining despite the comprehensive reform. It also addresses the challenges facing caseworkers and general practitioners in assessing mental disorders and granting benefits on the grounds of mental ill-health. It focuses on the role of the public employment service and municipalities and the tools they have to deal with mental illness among the unemployed and social assistance recipients. Finally, the chapter examines the effectiveness of active labour market programmes to promote employment among those with mental disorders.

This chapter discusses the effectiveness of the mental health system in providing adequate treatment to persons with common mental disorders, subsequently looking at the resource capacity in primary health care services, treatment options and the accessibility of specialist mental health care services. It then reviews the recent policy initiatives to improve co-ordination between the mental health and the employment system and the extent to which rehabilitation services are offered in an integrated way.