This paper estimates the causal effect of scaling up access to psychotherapy. I study a 2008 reform of the Danish public health insurance, which introduced 60% coverage for psychotherapy by private practice psychologists for patients aged 18–37 diagnosed with depression or anxiety. Using administrative data from 1995–2019 and quasi-experimental methods, I show that psychotherapy coverage reduces psychiatric hospital contacts, physical health care use, and suicide attempts, but has no effect on labor market outcomes, including employment or disability pension. Still, savings from reduced use of other health care services exceed policy costs, making it both cost-reducing and welfare-improving.

We provide a novel decomposition of changing gaps in life expectancy between rich and poor into differential changes in age-specific mortality rates and differences in “survivability.” Declining age-specific mortality rates increases life expectancy, but the gain is small if the likelihood of living to this age is small (ex ante survivability) or if the expected remaining lifetime is short (ex post survivability). Lower survivability of the poor explains half of the recent rise in inequality in the United States and the entire rise in Denmark. Declines in cardiovascular mortality benefited rich and poor, but inequality increased because of differences in lifestyle-related survivability.