Economists find social media harms young people's mental health

By MILLIE MUROI, Economics Writer

If the latest research is anything to go by, my risk of developing a mental health disorder is rather high compared to much of the population. I’m in my mid-20s, female, and I can’t remember a day in the past decade that I’ve gone without social media.

My first year of high school was the first year I dipped my toe into the space. Until I was about 12, communicating with anyone outside of family, and beyond school hours, was limited to play dates, after-school activities and rookie email chains when I finally got my turn on the family computer.

I grew up alongside social media, working my way through high school as Facebook and Instagram morphed from clunky, teenage versions of themselves, to more seamless, somewhat creepily curated “grown-up” platforms.

Perhaps it’s fitting, then, that from December, social media platforms will be limited to those aged 16 or older – in a world-first – right here in Australia. There’s been plenty of fair and reasonable criticism against the policy, but there’s solid evidence a social media ban for teens could be a worthwhile pursuit.

Dr Andrew Leigh – former economics professor and now assistant minister for competition and treasury – and health economist Dr Stephen Robson recently documented a “substantial worsening” in the mental health of Australians aged 15 to 24 over the past few decades, suggesting smartphones and social media might be the killer bullet ripping through their mental wellbeing.

It’s not a new theory that social media is, at least partly, to blame for the rise in self-harm hospitalisations and suicide deaths. But Leigh and Robson’s study steps through the data and existing body of research, laying out why the link between social media and the tumble in young peoples’ mental health is causal rather than just correlative.

There are various signs that, when it comes to youth mental health, the proliferation of social media has been a driving force – and not in a good way.

So, how do we know what’s causing what?

Between the 2007-10 and 2019-22 periods, there was a 50 per cent surge in the share of young people reporting a mental health disorder, a 35 per cent climb in self-harm hospitalisations among young people, and a 34 per cent jump in the suicide rate among – you guessed it – young people.

It’s little coincidence that the share of children aged six to 13 with mobile phones went from virtually none in 2006 (the first iPhone was released in 2007) to 33 per cent in 2020, with screen time also shooting up over the same period. Major social media platforms also emerged around the same time: Facebook and Twitter (now X) in 2006, Tumblr in 2007, and Instagram and Snapchat in 2010.

As Leigh points out, many studies have shown the damaging effects of screen time on mental health – including depression, anxiety, body image issues and eating disorders. And it’s young women who are suffering the most, because they’re more likely than young men to be invested in social media over other activities like gaming.

Rates of young men experiencing a mental disorder were 40 per cent higher in the 2019-22 period compared to the 2007-10 period, and 60 per cent higher for young women. The gaps in self-harm hospitalisations and suicide deaths between young men and women are even wider.

Now, there’s little doubt the housing crisis and soaring cost-of-living pressures have taken a toll on the mental health of young people, who tend to be among the hardest hit by economic insecurity. But Leigh says the data shows the worsening in mental health pre-dates COVID-19 and the recent spurt of inflation, with a significant drop-off in young people’s wellbeing – especially that of women – from about 2010.

So, how do we know social media is actually leading to worse mental health, rather than just being statistically linked to it?

First, an Australian survey of kids aged 11 to 17 shows the more hours spent online on a typical weekend day, the higher their levels of psychological distress tended to be.

Second, the fact that young women’s mental health has dropped off more significantly than that of young men bolsters the idea that social media may be to blame, since they tend to use social media more heavily.

Leigh says we can also look at what young people think. When asked why they think mental health has worsened, the top answer – ranked ahead of cost of living, drugs and alcohol, and climate change – is the increased use of social media.

Fourth, we can look at a “natural experiment”, where no one has intentionally designed conditions to test and observe a theory, but a situation occurs in the real world that allows researchers to examine the impact of something. A relevant one is the rollout of Facebook across US universities. As students were granted access at various universities, there was a parallel worsening in mental health and increased use of campus mental-health services.

Fifth, in randomised experiments, those who were asked to reduce their use of social media for three weeks became less lonely and depressed.

And finally, Leigh says social media companies themselves see a link between use of their products and adverse mental health outcomes in young people.

Of course, even with all this evidence, it’s not as easy as saying social media is evil – or that an age-based ban is the best solution.

Indeed, I think the social media ban has its issues. It cuts off kids (who may already be isolated from those around them) from online peers who may be their main source of company, comfort and friendship; it reduces the ability of kids to share ideas and form connections with people across international borders; and there are questions about how they will learn to navigate the social media landscape once they turn 16.

As an avid social media user myself, I can see both the positive and negative impacts these platforms have had on my life. I’ve learned to curate my content (mostly) to people and things that spark joy (hello, digital Marie Condo), or inspire me to become a better person. But I think in the current digital environment, being shielded from social media for a few extra years would do more good than harm.

There’s also a compelling case – when mental health is deteriorating among young people – as to why, even if we don’t have all the information or the perfect solution, we need to act fast. And being the first in the world to have a social media ban means we’ll be helping the world get closer to identifying the wrong solutions and finding the right ones.

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Productivity is magical, but don't forget the side effects

Something we’ve had to relearn in this annus horribilis is that the state governments still play a big part in the daily working of the economy. Another thing we’ve realised is that the Productivity Commission is so important that some of the states are setting up their own versions.

When you put the word “productivity” into the name of a government agency, you guarantee it will spend a lot of its time explaining what productivity is – a lot of people think it’s a high-sounding word for production; others that it means we need to work harder – and why it’s the closest economics comes to magic.

Earlier this year the NSW Productivity Commission issued a green paper that began with the best sales job for the concept I’ve seen. Its title said it all: Productivity drives prosperity.

Its simple definition of productivity is that it “measures how well we do with what we have. Productivity is the most important tool we have for improving our economic [I’d prefer to say our material] wellbeing,” it says.

“Our productivity grows as we learn how to produce more and better goods and services using less effort and resources. It is the main driver of improvements in welfare and overall [material] living standards.

“From decade to decade, productivity growth arguably matters more than any other number in an economy . . . Growth in productivity is the very essence of economic progress. It has given us the rich-world living standards we so enjoy.”

Productivity improvement itself is driven by increases in our stock of knowledge and expertise (or “human capital stock”) and by investment in physical capital (“physical capital stock”).

But by far the biggest long-term driver of productivity is the stock of advances known as “technological innovation” – a term that covers everything from new medicines to industrial machinery to global positioning systems.

Technology’s contribution to overall productivity growth has been estimated at 80 per cent, the paper says.

“Our future prosperity depends upon how well we do at growing more productive – how smart we are in organising ourselves, investing in people and technology, getting more out of both our physical and human potential.”

The (real) Productivity Commission has pointed out that on average it takes five days for an Australian worker to produce what a US worker can produce in four. (That’s not necessarily because the Yanks work harder than we do, but because they have fancier equipment to work with, and better organised offices and factories – not to mention greater economies of scale.)

The paper notes that productivity improvement hinges on people’s ability to change. “Unwelcome as it has been, the COVID-19 episode has shown that when we need to, we can change more rapidly than we thought. There is no reason we can’t do the same to achieve greater productivity and raise our future incomes.”

Technological innovation is the process of creating something valuable through a new idea. You may think that new technology destroys jobs – as the move to renewable energy is threatening the prospects of jobs in coal mining – but, if you take a wider view, you see that it actually moves jobs from one part of the economy to another and, because this makes our production more valuable, increases our real income and spending and so ends up increasing total employment.

“All through history,” the report adds, “[technological innovation] has been a huge source of new jobs, from medical technology to web design to solar panel installation. And as these new roles are created and filled, they in turn create new spending power that boosts demand for everything from buildings to home-delivered food.

But the thing I liked best about the NSW Productivity Commission’s sales pitch was the examples it quoted of how technology-driven productivity has improved our living standards.

Take, medicine. “The French king Louis XV was perhaps the world’s richest human being in 1774 – yet the healthcare of the day could not save him from smallpox. Today’s healthcare saves us from far worse conditions every day at affordable cost.”

Or farming. “In 1789, former burglar James Ruse produced [Australia’s] first successful grain harvest on a 12-hectare farm at Rose Hill. Today, the average NSW broadacre property is 2700 hectares and produced far more on every hectare, often with no more people.”

Or (pre-pandemic) travel. About “67 years after the invention of powered flight, in 1970, a Sydney-to-London return flight cost $4600, equivalent to more than $50,000 in today’s terms. Today, we can purchase that flight for less than $1400 – less than one-30th of its 1970 price.”

Or communications. “Australia’s first hand-held mobile call was made at the Sydney Opera House in February 1987 on a brick-like device costing $4000 ($10,000 in today’s terms). Today we can buy a new smartphone for just $150, and it has capabilities barely dreamt of a third of a century ago.”

There are just two points I need add. The first is that there’s a reason we’re getting so many glowing testimonials to the great benefits of productivity improvement: for the past decade, neither we nor the other rich countries have been seeing nearly as much improvement as we’ve been used to.

Second, economists, econocrats and business people have been used to talking about the economy in isolation from the natural environment in which it exists and upon which it depends, and defining “economic wellbeing” as though it’s unaffected by all the damage our economic activity does to the environment.

As each month passes, this not-my-department categorisation of “the economy” is becoming increasingly incongruous, misleading and “what planet are you guys living on?”.

What’s more, the growing evidence that all this year’s “social distancing” is having significant adverse effects on people’s mental health is a reminder we should stop assuming that ever-faster and more complicated economic life is causing no “negative externalities” for our mental wellbeing.

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Mental health: the smart way to increase happiness

You have to hand it to Scott Morrison. He is, without doubt, the most skillful politician we’ve seen since John Howard. He runs rings around his opponents. It’s just a pity he puts so much time into strengthening his own position by making his opponents look bad and so little into strengthening our position by working on some of our many problems.

Speaking of problems, on the very day the Royal Commission into Aged Care was revealing how appallingly we treat so many of our parents and grandparents, the Productivity Commission released a draft report on how much our treatment of the mentally ill leaves to be desired.

Sometimes I think that if hastening the economy’s growth is intended to increase our happiness, why don’t we do more to increase it directly by reducing the unhappiness of, for instance, those in old people’s homes and those suffering mental illness, not to mention their families?

Why do you and I somehow imagine it won’t be us being mistreated in some institution in a few years’ time? Why could mental ill-health never reach us or our family and friends?

The commission’s report found that almost half of Australian adults will meet the diagnosis for a mental illness at some point in their lives. In any given year, however, one person in five will meet the criteria. And, although it can affect people of any age, three-quarters of those who develop mental illness first experience problems before they’re 25.

And yet we’ve gone for years providing quite inadequate help to the mentally troubled. Why? Because physical problems are more visible and less debatable. But also because the stigma that continues to attach to mental problems makes sufferers reluctant to admit to them, and the rest of us reluctant to dwell on it.

Mental illness includes more common conditions such as anxiety, substance use and depression, plus less common conditions such as eating disorders, attention-deficit/hyperactivity disorder, bipolar disorder and schizophrenia. And suicide, of course.

The report says that many who seek treatment for mental problems aren’t receiving the level of care necessary. As a result, too many people suffer additional and preventable physical and mental distress, relationship breakdown, stigma, and loss of life satisfaction (the $10 words for happiness) and opportunities.

A big part of the problem is that the treatment of mental illness has been tacked on to a health system designed around the characteristics of physical illness, especially acute rather than chronic illnesses.

Five long-standing and much-reported-on problems causing the mental health system to deliver poor results are, the report says, first, the underinvestment in prevention and early intervention. This is what makes the fact that mental problems tend to start early and get worse good news, in a sense. It means that, if you get in early, you can stop people experiencing years of unhappiness (not to mention cost to the taxpayer).

Second, the focus on clinical services – things done by doctors and nurses – often means overlooking other things and other people contributing to mental health, including the important role played by carers and family, as well as the providers of social support services.

Third, the frequent difficulties finding suitable social supports, sometimes because they just don’t exist in regional areas. This is despite suicide rates, for example, being much higher outside the capital cities.

Fourth, the social support people do receive is often well below best-practice, isn’t sustained as their condition evolves or their circumstances change, and is often unconnected with the clinical services they get.

Fifth, the “lack of clarity” about roles, responsibility and funding between the federal and state governments. This means persistent wasteful overlaps existing side by side with yawning gaps in the services provided. And it means no level of government accepts responsibility for “the system’s” poor performance.

It’s clear we’re not spending enough on mental healthcare. But this is where we get into an old argument. Ask the people running the system and their answer is always “just give us a shedload more money and we’ll decide how best to spend it”. But ask the Smaller Government brigade and they’ll say “we’re already spending far more than we did and spending even more would improve nothing”.

As usual, the truth’s in the middle. It’s true we’re spending a lot more without much evidence of improved results, but equally true we need to spend more – particularly on social support, such as suitable housing. Fix people, throw them onto the street, and see how well they do.

Sorry, but the days of “trust me, I’m a doctor/teacher/public servant/whatever” are gone. Too many occupations have abused our trust. We need to spend what we’re already spending a lot more effectively – particularly on prevention and early detection, on the non-clinical aspects of the problem, and on better coordination of federal and state roles – as a condition of spending more.

And that will mean paying a bit more tax. After all, if we’re so willing to spend on a big-screen TV or overseas holiday or new car to make us happier, what’s the hang-up with spending via taxes to improve our treatment in old age or should we or a rello strike mental problems?

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Kiwis go one up and bring happiness to the budget

Like the past, New Zealand is a foreign country. They do things differently there. While we’ve just had a budget promising what seems like the world’s biggest tax cut, the Kiwis have just had what may be the world’s first “wellbeing budget”. Bit of a contrast.

I’ve long believed that all government politicians everywhere, when they’re not simply delivering for their backers, are trying to make voters happy and thus get themselves re-elected. They just differ in how they go about it.

Like governments everywhere, our governments of both colours have seen delivering economic growth - and the jobs and higher material living standards it’s expected to bring - as the chief thing we want of them to make us happier.

To this end they’ve adopted as their chief indicator of success the rate of growth in GDP – gross domestic product – which measures the nation’s production of goods and services during a period.
They’ve largely assumed that the extra income produced by this growth is distributed fairly between us - though, in recent decades, the share going to those near the top has grown a lot faster than the shares of everyone else.

This, presumably, is Australian voters’ “revealed preference”, since we’ve just rejected the party promising to cut various tax breaks going mainly to high income-earners and use the proceeds to increase spending on hospitals, schools and childcare, in favour of the party offering tax cuts worth an immediate saving of $1080 a year to middle income-earners and delayed savings of up to $11,640 a year to those of us on $200,000 and above.

According to the Liberal winners, voters in outer suburbs and the regions turned away from Labor because it would have dashed their “aspirations” to one day be earning two or three times what they’re earning today and so be raking it in from family trusts, negatively geared investments and, above all, refunds of unused franking credits.

But if our aspirations to happiness revolve around more money in general and less tax in particular, our cousins across the dutch aspire to a radically different brand of happiness.

According to their Finance Minister Grant Robertson, in his budget speech, New Zealanders were asking “if we have declared success because we have a relatively high rate of GDP growth, why are the things that we value going backwards - like child wellbeing, a warm, dry home for all, mental health services or rivers and lakes we can swim in?

“The answer to that question was that the things New Zealanders valued were not being sufficiently valued by the government . . . So, today in this first wellbeing budget, we are measuring and focusing on what New Zealanders value – the health of our people and our environment, the strengths of our communities and the prosperity of our nation.

“Success is making New Zealand both a great place to make a living, and a great place to make a life.”

According to the nest of socialists who’ve overrun the NZ Treasury, “there is more to wellbeing than just a healthy economy”. So GDP has been moved from its central place, replaced by Treasury’s “living standards framework”, based on the four sources of capital: natural capital (land, soil, water, plants and animals, minerals and energy resources), human capital (the education, skills and health of the population), social capital (the behavioural norms and institutions that influence the way people live and work together) and human-made capital (factories, offices, equipment, houses and infrastructure).

The living standards framework covers 12 “domains”: income and consumption, and jobs and earnings (which two cover GDP), and “subjective wellbeing” (the $10 term for happiness), plus health, housing, knowledge and skills, the environment, civic engagement and governance, time use, safety and security, cultural identity and social connections.

The wellbeing budget then set out five government priorities: improving mental health, reducing child poverty, addressing inequalities faced by Maori and Pacific island people, thriving in a digital age, and transitioning to a low-emission, sustainable economy.

I’ve often thought this would be the right way for governments to go about increasing “aggregate happiness” – by focusing on reducing the main sources of un-happiness.

To make a start, the budget provides almost $1billion over five years to improve the wellbeing of children, including extra funding for low-income schools, more help for children affected by domestic and sexual violence, and indexing family benefits to wages rather than prices.

The budget’s expensive mental health package includes creation of a new frontline service and funds to help people with mild-to-moderate mental health problems rather than making them wait until their problems worsen. Helping people with addictions is also seen as a health issue.

A “sustainable land-use” package works on the environmental challenges facing agriculture, including excess nutrient flows into iconic lakes and rivers.

Despite all this, the budget sticks to the government’s budget responsibility rules, with surpluses forecast and reduction of public debt. According to Saint Jacinda of Ardern, the wellbeing budget “shows you can be both economically responsible and kind”.

So, those uppity Kiwis think they can walk and chew gum at the same time. Fortunately, we Aussies know not to try.

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Unhealthy, unhappy lives aren't fair exchange for higher incomes

In his Australia Day address, social researcher Hugh Mackay said that "the Australia I love today – this sleep-deprived, overweight, overmedicated, anxious, smartphone-addicted society – is a very different place from the Australia I used to love".

He identified three big changes: the gender revolution, increasing disparity in wealth, and social fragmentation.

He approves of the first, but laments that we’re "learning to live with a chasm of income inequality" and that social fragmentation means Australians are become "more individualistic, more materialistic, more competitive".

The third big change, he said, posed the biggest challenge – preserving social cohesion.

Earlier this month, the playwright David Williamson lamented that, since the advent of neoliberalism, "the world has become a nastier, more competitive, more ruthless place".

"There’s no perfect society, but I don’t think it needs to be as brutal as it is now."

As we move on from our officially required season of national navel-gazing – "yes, but what does it mean to be Australian?" – these concerns are worth pondering.

Economists object to being blamed for every ill that’s beset our country in the past 40 years. Where’s the proof that this economic policy or that has caused a worsening in mental health, they demand to be told.

It’s true that few developments in society have just a single cause. It’s also true there’s little hard evidence that the A of “microeconomic reform” caused the B of more suicides, for instance.

But there’s a lot of circumstantial evidence. After all, the specific objective of micro reform was to increase economic efficiency by making our markets more intensely competitive. The economists’ basic model views us as individuals, motivated by self-interest, and the goal of faster growth in the economy is aimed at raising our material standard of living.

And if some of our problems stem from changing technology – pursuing friendship via screens, for instance – can economists disclaim all responsibility when one of their stated aims is to encourage technological advance in the name of higher productivity?

Economists assume that economic growth will leave us all better off. Most take little interest in how evenly or unevenly the additional income is shared between households.

The Productivity Commission’s recent and frequently quoted report, finding that the distribution of income hasn’t become more unequal, refers to recent years, not the past 40. And the report averages away the uncomfortable truth that the incomes of chief executives and other members of the top 1 per cent have increased many times faster than for the rest of us.

Sometimes what’s happened since the mid-1980s reminds me of the old advertisement: are you smoking more, but enjoying it less?

Our real incomes have grown considerably over the years – even for people at the bottom – and economic reform can take a fair bit of the credit. It can take most of the credit for the remarkable truth that, unlike all the other rich countries, we’ve gone for 27 years without our least fortunate experiencing the great economic and social pain of recession and mass job loss.

But though most of us are earning and spending more than ever, there’s evidence we’re enjoying it less. Our higher material living standards have come at the cost of increasing social and health problems.

Is that so hard to believe when the key driver of our higher incomes is more intense competition between us?

Economists generally take little interest in social and health problems, regarding them as outside their field. But though problems such as loneliness, stress, anxiety, depression and obesity were with us long before the arrival of neoliberalism, they seem to have got worse since the mid-1980s.

Last year, Dr Michelle Lim, a clinical psychologist at Swinburne University, and her colleagues produced the Australian Loneliness Report, which found that more than one in four Australians feels lonely three or more days a week.

It’s most common among those who are single, separated or divorced. Compared to other Australians, the lonely report higher social anxiety and depression, poorer psychological health and quality of life, and fewer meaningful relationships and social interactions.

Turning to increased stress, it’s an inevitable consequence of living in bigger, faster cities and working in more competitive workplaces. Our bodies respond to stressful events with a surge of adrenaline, which increases our reaction speed and helps ensure our survival.

Trouble is, our bodies aren’t designed to cope with repeated stressful events and adrenaline rushes. Our readiness for fight or flight doesn’t decline, and we remain permanently aroused, which damages our health, making us more at risk of a heart attack or getting sick in other ways.

If more "jobs and growth" and the higher incomes they bring are intended to make us happier, maybe governments would do better by us if they switched their objective from increasing happiness to reducing unhappiness.

For instance, if the banks are now being criticised on all sides for putting profits before people, why are governments – facing an epidemic of obesity and diabetes - so respectful of the food and beverage industry’s right to continue fatten its profits by fattening us and our kids?

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