Poverty, Depression, and Anxiety: Causal Evidence and Mechanisms

48 Pages Posted: 18 May 2020 Last revised: 16 Mar 2022

See all articles by Matthew Ridley

Matthew Ridley

Massachusetts Institute of Technology (MIT) - Economics, Finance, Accounting (EFA)

Gautam Rao

Harvard University - Department of Economics

Frank Schilbach

Massachusetts Institute of Technology (MIT) - Economics, Finance, Accounting (EFA)

Vikram Patel

Public Health Foundation of India - Centre for Chronic Conditions and Injuries; Harvard University - Harvard Medical School; Global Nature Care Sangathan Group of Institutions

Date Written: May 2020

Abstract

Why are people living in poverty disproportionately affected by mental illness? We review the interdisciplinary evidence of the bi-directional causal relationship between poverty and common mental illnesses – depression and anxiety – and the underlying mechanisms. Research shows that mental illness reduces employment and therefore income and that psychological interventions generate economic gains. Similarly, negative economic shocks cause mental illness, and anti-poverty programs, such as cash transfers, improve mental health. A crucial step toward the design of effective policies is to better understand the mechanisms underlying these causal effects.

Suggested Citation

Ridley, Matthew and Rao, Gautam and Schilbach, Frank and Patel, Vikram, Poverty, Depression, and Anxiety: Causal Evidence and Mechanisms (May 2020). NBER Working Paper No. w27157, Available at SSRN: https://ssrn.com/abstract=3603787

Matthew Ridley (Contact Author)

Massachusetts Institute of Technology (MIT) - Economics, Finance, Accounting (EFA) ( email )

77 Massachusetts Avenue
Cambridge, MA 02139-4307
United States

Gautam Rao

Harvard University - Department of Economics ( email )

Littauer Center
Cambridge, MA 02138
United States

Frank Schilbach

Massachusetts Institute of Technology (MIT) - Economics, Finance, Accounting (EFA) ( email )

77 Massachusetts Avenue
Cambridge, MA 02139-4307
United States

Vikram Patel

Public Health Foundation of India - Centre for Chronic Conditions and Injuries ( email )

India

Harvard University - Harvard Medical School ( email )

25 Shattuck St
Boston, MA 02115
United States

Global Nature Care Sangathan Group of Institutions ( email )

India

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