Economists Explore the Relationships Between Poverty and Mental Health

Researchers review the latest scientific evidence for the effects of poverty on mental health.

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A new article published in Science reviews the existing literature on the relationship between poverty and mental health–focusing on depression and anxiety disorders. The research was led by Matthew Ridley, Gautam Rao, and Frank Schilbach, leading economists from MIT and Harvard, with the well-known psychiatrist and global mental health advocate Vikram Patel.

The researchers provide a complex picture, exploring both how living under precarious economic conditions causes psychological distress and how this distress affects a person’s ability to better their economic conditions. The authors argue for the importance of studying mental health within the field of economics:

“We explore the evidence for the bidirectional causal relationship between poverty and mental health and its underlying mechanisms. Poverty is also correlated with poor physical health, but the relationship between mental illness and poverty has been overlooked and is worth emphasizing. Mental health has historically not been considered a priority by economists and policymakers, and until recently, mental health care had not been evaluated as an anti-poverty tool.
Poverty’s Effect on Mental Health.

Natural experiments—experimental studies in which the changes in conditions occur naturally—have provided evidence that there is a causal relationship between job loss, economic decline, and the increase of mental illness diagnoses within the population. Similarly, when people in poverty experience an increase in income, psychological distress is reduced.

Additionally, when anti-poverty programs are implemented, symptoms of depression, stress, and worry are reduced, and people experience more happiness, on average. Antipoverty programs’ positive effects last for years after they have been implemented. Economic interventions such as increasing the minimum wage have also been found to decrease suicide rates.

People who live in poverty experience financial insecurity and economic uncertainty, which creates anxiety over their ability to meet their basic needs and those of their family members. The sustained anxiety, worry, and stress can deteriorate both mental and physical health. Job loss or income reductions often drive the phenomenon of deaths of despair. When people foresee long-term economic hardship, they are more likely to develop an addiction or lose their lives due to drug overdoses or suicide.

Previous studies have shown that economic deprivation in the United States has influenced the recent increase in suicide rates. Also, for those suffering due to the effects of poverty, psychotherapy has been found to be less effective in reducing distress when it does not address economic factors. The marginalization of people living in poverty may lead to social isolation, loneliness, diminished happiness, and reduced life-satisfaction, which are factors associated with depression.

Economically disadvantaged groups are more likely to be exposed to pollution, temperature extremes, and challenging sleep environments as they are disproportionately affected by policies that create these environmental conditions. Pollution exposure has been connected with negative effects on both physical and mental health. At the same time, temperature extremes and sleep deprivation are associated with increases in suicide, self-harm, and the diagnosis of mental disorders.

Due to the living conditions of communities in poverty, they are more likely to be exposed to traumatic events such as crime, the loss of a loved one, and intimate partner violence. Exposure to violent events such as these, alongside economic stress and malnutrition, affects young children’s psychosocial and neurological development, which increases the odds of developing a mental disorder in adulthood.

The Effect of Mental Health on Poverty.

The literature also indicates a causal relationship between experiencing a psychological disorder and decreased economic circumstances (such as lower-income, job loss, and unemployment rates). Moreover, people who receive psychotherapy for their psychological disorder are likely to bypass some of the barriers associated with poverty or financial stress.

The symptoms associated with depression and anxiety hinder a person’s ability to work due to fatigue, lack of motivation, impaired concentration, excessive rumination, difficulties with short-term and long-term memories, and other cognitive functions. The authors add that:

“Such cognitive impacts could alter a range of economic decisions and outcomes, from finding jobs to saving to education and by exacerbating ‘behavioral biases’ that economists increasingly recognize as important. For example, depressed individuals might avoid making active choices and may stick with ‘default options,’ may have decreased sensitivity to incentives because of anhedonia, or may have difficulty choosing among several options.”

Decision-making is also impaired by negative beliefs about oneself, others, the world, and expected outcomes. These beliefs also affect people’s preferences and their willingness to take risks, make investments, save money, and even take up social programs.

Social issues also reinforce the relationship between mental illness and poverty. For example, people diagnosed with a mental disorder experience stigma due to stereotypes, face discrimination in employment and receive lower wages. Furthermore, some countries exclude people with psychological disorders from receiving disability benefits.

In countries without proper healthcare access, people who live in poverty are more likely to pay for their medical treatment out of pocket. This becomes a barrier to receiving services. When they do receive services, their exorbitant costs impact the patient’s finances.

Moving Forward.

The authors identify a series of issues that may influence the prevalence of depression and anxiety in the coming years. Among them are the COVID-19 pandemic, climate change, excessive social media use, technological change, and globalization. To attend to these issues, Ridley and colleagues make some suggestions.

First, they suggest studying the effects of economic interventions on mental health and the effects of mental health interventions on economic issues. This can lead to better policies. For example, they mention:

“Combining psychological and economic interventions may lead to treatment effects that are greater than the sum of their parts. In particular, improved mental health could increase the economic returns of receiving cash or asset transfers by improving decision-making and productivity.

Because mental health services are underfunded, they also suggest giving proper funding to provide optimal services and expand their accessibility. This should be followed by a stimulation of the demand for these services by reducing stigma and promoting the use of these services.

This article provides clear and ample evidence of the relationship between poverty and the diagnosis of depression and anxiety while illustrating the complex dynamics in this relationship. The work of economists on these issues could benefit mental health providers who work with economically disadvantaged clients through the development of alternative and additional interventions that address their economic reality.

 

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Ridley, M., Rao, G., Schilbach, F. & Patel, V. (2020). Poverty, depression, and anxiety: Causal evidence and mechanisms. Science, 370(6522), DOI: 10.1126/science.aay0214 (Link)

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José G. Luiggi-Hernández
MIA Research News Team: José G. Luiggi-Hernández is a Clinical Psychology PhD student at Duquesne University with a background in public health. His current research and clinical interests involve understanding the lived experience of colonization using phenomenological, psychoanalytic, and decolonial frameworks. He has previously worked on research related to LGBTQ issues, health behaviors, mindfulness for chronic pain, CBT for diabetes and depression, among other projects.

14 COMMENTS

  1. There is a LOT of wealth in “mental health”. The wealth goes to those who are in the business of treating those who are perceived as less or have less.

    As far as happiness is concerned, ask any shrink how happy his job makes him. Usually doing good things make people feel a genuine satisfaction.

    • Since this featrued news item emerged, considerable effort was spent searching the original document and then contacting Science to understand how to create an appropriate response. Science letters allow for a letter of 300 words along with the attempt to draft an individual/collaborative response can occur. Contrary to Luiggi-Hernandez’s conclusion, I do not think the article provided clear and ample evidence between poverty and the creaton of diagnoses for depression…” Over 80 years ago, Kroll would write an autobiography, I Was a Sharecropper, where Maw would cry out, “Poverty warps all standards”. In the 80’s a visit with Donald Schon of MIT’s Planning Program, suggested a reading of Jorg Baumberger’s article in the Journal of Evolutionary Economics about Thomas Kuhn’s thesis on the Paradigm Shift. All the disciplines had cleared the hurdle except for Economics. Too, Lepowski’s article, “The Social Thermodynamics of Ilya Prigogine” in ’79 issue of Chemical and Engineering News also featured the Vanderbilt Economist, Gerogescu-Roegen advancing a an analytical context for qualitative economics. This approach is far different from the thought process driven by quantities of services.

      Further, from my direct involvement in the attempt to realize economic development by, for and within the X-Disability movement, time would be spent at conferences of the Association for Economic Opportunity, Alternatives, and even traveling to hear the Grameen Bank Founder, Mohammed Yuunus. Some of the readers might remember Mimi Kravitz’s effort of In-Cube in NYC in trying to develop businesses owned and operated by those who survived the mental health “treatments”.

      In addition, one would learn of Edgar Cahn’s concept of time banking, where one could realize a trade of skill for skill as a unit of time through a community organization. My costs could never be monetized for I could not understand how to factor in the expense of discrmination being experienced from outside of our immediate culture. When financial leaders tell you in response to a fundraising effort, “The Government takes care of the handciapped” in three minutes, there is no way to realize the creation of a more stable economy by which a legitimate economy can emerge that is shaped by our voices.

      The situation is even made more absurd in the egoic expression of the elected Mayors and councilpersons, who off camera humiliate and dismiss self and others for fear of a threat to their political advancement due in part to homogenization towards a norm of spoken diversity that can not reflect value with values.

      Hence, this article I believe only scratches the surface of the discourse around supply and demand in the markets from a quantitative perspective. When I believe our experiences are of a language of supra-rich qualities that are filtered out and ignored by the metrics invoked by the anlytics of the profession.

      Thus, to realize at times the mutal approvals of this page without going back to the source documents, leaves at risk the perpeutal convresation that is occurring in the rooms without us being present. For me, part of my challenge is trying to learn how to write a response to articles like this one, that essentially is saying, “Our House in On Fire” in the language of the Academy.

      And finally, one last resource studied from within planning was Ian McHarg’s Design with Nature. Systematically, the facets of a city would be mapped by data even to include a final chapter on Health and Pathology. The term “Mental Disease” was established only from information on psychiatric inpatient unduplicated admissions and similar inforemation for children. Could the concentration of responses in the core of the city been shaped more by data gleaned from public institutions versus a different, more confidential operations of medical care reserved for middle and upper classes of wealth? The Scales of Justice” need to reflect our role as Citizens of the We.

  2. One of the things that seem to be missing in these arguments is the effect of diet.
    Let me use the example of the Turkish troops who were captured by the Chinese when Gen MacArthur let the Chinese overwhelm his overextended troops. Although our GI’s suffered miserably in Chinese prison camps, the Turks didn’t- being members of a peasant army in a poor society, they started their captivity by consuming all the edible weeds in their camps and saving their seeds (I don’t imagine that the rats in their camps lasted very long, either). Unlike our captive GI’s, they were still in decent shape when they were repatriated, as they’d supplemented their miserable Chinese diets with anything edible they could get their hands on.

  3. “Combining psychological and economic interventions may lead to treatment effects that are greater than the sum of their parts. In particular, improved mental health could increase the economic returns of receiving cash or asset transfers by improving decision-making and productivity.”

    “Because mental health services are underfunded, they also suggest giving proper funding to provide optimal services and expand their accessibility. This should be followed by a stimulation of the demand for these services by reducing stigma and promoting the use of these services.

    This article provides clear and ample evidence of the relationship between poverty and the diagnosis of depression and anxiety while illustrating the complex dynamics in this relationship. The work of economists on these issues could benefit mental health providers who work with economically disadvantaged clients through the development of alternative and additional interventions that address their economic reality.”

    Rarely does an article on MIA make me want to throw up.

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