ABSTRACT
This paper examines the links between adverse events, depression, and decision-making in Nigeria. It investigates how events such as conflicts, shocks, and deaths of family members can affect short-term mental health, as well as longer-term decisions on economic activities and human capital investments. First, the findings show that exposure to conflict has the largest and strongest relationship with depression, associated with a 21-26 percentage point increase in the probability of depressive symptomatology. Second, depression is associated with lower labour force participation, child educational investment, and annual per capita income, holding constant covariates such as exposure to adverse events. People with depressive symptoms are 8 percentage points less likely to work. In addition, parents exhibiting depressive symptoms spend 18% less on their children's education. These findings show the links between adverse events and important outcomes such as labour and education through mental health. As such, policymakers must consider both the direct and indirect effects that adverse events - particularly conflicts - and depression can have on welfare.
