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The Effects of Mental Health Interventions on Labor Market Outcomes in Low- and Middle-Income Countries

Author

Listed:
  • Lund, Crick
  • Orkin, Kate
  • Witte, Marc
  • Walker, John
  • Davies, Thandi
  • Haushofer, Johannes
  • Murray, Sarah
  • Bass, Judy
  • Murray, Laura
  • Tol, Wietse
  • Patel, Vikram

Abstract

Mental health conditions are prevalent but rarely treated in low- and middle-income countries (LMICs). Little is known about how these conditions affect economic participation. This paper shows that treating mental health conditions substantially improves recipients’ capacity to work in these contexts. First, we perform a systematic review and meta-analysis of all randomized controlled trials (RCTs) ever conducted that evaluate treatments for mental ill-health and measure economic outcomes in LMICs. On average, treating common mental disorders like depression with psychotherapy improves an aggregate of labor market outcomes made up of employment, time spent working, capacity to work and job search by 0.16 standard deviations. Treating severe mental disorders, like schizophrenia, improves the aggregate by 0.30 standard deviations, but effects are noisily estimated. Second, we build a new dataset, pooling all available microdata from RCTs using the most common trial design: studies of psychotherapy in LMICs that treated depression and measured days participants were unable to work in the past month. We observe comparable treatment effects on mental health and work outcomes in this sub-sample of highly similar studies. We also show evidence consistent with mental health being the mechanism through which psychotherapy improves work outcomes.

Suggested Citation

  • Lund, Crick & Orkin, Kate & Witte, Marc & Walker, John & Davies, Thandi & Haushofer, Johannes & Murray, Sarah & Bass, Judy & Murray, Laura & Tol, Wietse & Patel, Vikram, 2024. "The Effects of Mental Health Interventions on Labor Market Outcomes in Low- and Middle-Income Countries," CEPR Discussion Papers 19118, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:19118
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    More about this item

    Keywords

    Labor; Development; Human capital; Mental health; Psychotherapy;
    All these keywords.

    JEL classification:

    • D9 - Microeconomics - - Micro-Based Behavioral Economics
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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