Template-Type: ReDIF-Paper 1.0 Series: Tinbergen Institute Discussion Papers Creation-Date: 2024-06-20 Number: 24-043/V Author-Name: Crick Lund Author-Workplace-Name: King’s College London Author-Name: Kate Orkin Author-Workplace-Name: University of Oxford Author-Name: Marc Witte Author-Workplace-Name: VU Amsterdam Author-Name: John Walker Author-Workplace-Name: University of Oxford Author-Name: Thandi Davies Author-Workplace-Name: University of Cape Town Author-Name: Johannes Haushofer Author-Workplace-Name: Stockholm University Author-Name: Sarah Murray Author-Workplace-Name: John Hopkins University Author-Name: Judy Bass Author-Workplace-Name: John Hopkins University Author-Name: Laura Murray Author-Workplace-Name: John Hopkins University Author-Name: Wietse Tol Author-Workplace-Name: University of Copenhagen Author-Name: Vikram Patel Author-Workplace-Name: Harvard University Title: The effects of mental health interventions on labor market outcomes in low- and middle- income countries 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 aver- age, 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. Classification-JEL: D9, I14, J24, O1 Keywords: Labor, Development, Human capital, Mental health, Psychotherapy File-URL: https://papers.tinbergen.nl/24043.pdf File-Format: application/pdf File-Size: 4.002.161 bytes Handle: RePEc:tin:wpaper:20240043