The economic impacts of COVID-19 on household mental health: Panel evidence from Pakistan (preprint)

ABSTRACT

We combine data collected just prior to the unfolding of COVID-19 with follow-up data from July 2020 to document the adverse economic effects of the pandemic and resulting impact on parental and child mental well-being in rural and semi-urban Pakistan. 22% of the households in our sample are affected by job loss, with monthly income down 34% on average. Our difference-in-difference results show that job loss is associated with a 0.73 standard deviation (SD) reduction in adult mental health score (K10), a 0.55 SD reduction in a ‘Hope’ index of children’s aspirations, agency and future pathways, and a 0.33 SD increase in children’s depression symptoms. In addition, we observe higher levels of parental stress and anger reported by children, as well as an increase in reported prevalence of domestic violence. Overall, we document that the pandemic has disproportionately and negatively affected the economic and mental well-being of the most vulnerable households in our sample.