Economic impacts and cost-effectiveness of evidence-based supported employment for people with severe mental illness: A review of the literature

This paper begins by briefly describing the rationale for, principles, and evidence in support of, the Individual Placement and Support (IPS) model of supported employment for people with mental illness. It then summarizes the literature concerning the impacts of programs of this type on health care cost offsets and on its costeffectiveness. Factors that appear likely to influence cost-effectiveness, including rules governing disability benefits and earned income, and the unemployment rate, are also discussed. The review concludes that the data trend toward supported employment being associated with a reduction in health care costs, which is likely to increase over time. Although further research is desirable, the evidence to date strongly favors a policy of at least gradually replacing traditional vocational rehabilitation programs with IPS programs.