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Objective: Mental illness is consistently underrecognized in general health care, which may lead to underestimation of its effects on awards for social security payments. The authors investigated empirically the contribution of psychiatric morbidity to the award of disability pensions, in particular those awarded for physical diagnoses. Method: Using a historical cohort design, the authors utilized a unique link between a large epidemiological cohort study and a comprehensive national database. Baseline information on mental and physical health was gathered from a 1995–1997 population-based health study of those of working age (20–66 years) in Nord-Trøndelag County, Norway, who were not recipients of disability pension (N=45,782). The outcome assessed was the awarding of disability pensions ascribed to specific ICD-10 diagnoses within 6 to 30 months as registered in the National Insurance Administration. Results: Anxiety and depression were robust predictors of disability pension awards in general, even when disability pensions awarded for any mental disorder were excluded. These effects were only partly explained by baseline somatic symptoms and diagnoses and were stronger in individuals aged 20–44 than in those aged 45–66. Somatic symptoms accounted for far more disability pension awards than did somatic diagnoses. Conclusions: The cost of common mental disorders in terms of disability pensions and lost productivity may have been considerably underestimated by official statistics, particularly for younger claimants. The results suggest this might be due both to overuse of physical diagnoses and underrecognition of common mental disorders in primary care.