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Income inequality increases the probability of being emotionally depressed, IDB study says

Income inequality can increase the probability of being emotionally depressed, particularly among people living in urban areas, according to a new study by the Inter-American Development Bank (IDB).

The probability of being depressed goes up when inequality, as measured by the GINI Index, increases, according to the study, which analyzed data from 93 countries from the 2007 Gallup Public Opinion Poll. People living in urban areas are more likely to be depressed than those living in rural areas, probably because inequality is more visible in urban areas. The study also found that the level of income, as measured by a country’s gross domestic product per capita, does not affect the probability of depression.

The IDB Working Paper “A Cross-Country Analysis of the Risk Factors for Depression at the Micro and Macro Level,” written by Natalia Melgar and Máximo Rossi, economists at Universidad de la República in Uruguay, is the first to offer a broad cross-country analysis of the impact of environmental factors such as economic performance on depression.

The paper is part of the ongoing IDB research project on quality of life in Latin America and the Caribbean. Depression is one of the world’s most widespread mental illnesses. Mental disorders can cost as much as 4 percent of the gross domestic product, according to the World Health Organization. The study of the factors that facilitate depression is important to improve quality of life and happiness, and useful for policymakers as they identify at-risk groups and design public health policies.

The paper measures the likelihood of citizens of a given country to be depressed than people in the United States. The researchers used the United States as a benchmark because of the wide availability of data and research. Citizens in Ethiopia, South Korea and Bolivia have the highest probability of being depressed than people living in the United States while citizens in Mauritania, Albania and Denmark are the least likely. Thirty-two countries showed no significant differences in probability against the United States.

Chart I: Countries where people are more likely to be depressed than U.S. citizens

The likelihood of being depressed decreases when the percentage of religious people in the total population is high, according to research. Among the 14 countries with the highest inequality that registered low probabilities, the paper found that at least eight had a high percentage of religious people: Honduras and Panama (high percentage of Catholics); Niger and Senegal (high percentage of Muslims); Jamaica and Uganda (high ratio of Protestants); and Brazil and Mozambique (where the aggregate affiliation with the three religions is very high). This effect may have more than compensated for the income inequality effect, according to the paper.

Chart II: Countries where people are less likely to be depressed than U.S. citizens

The paper also says that the likelihood of depression is lower in countries with a higher percentage of people aged 65 and older, while the probability tends to increase in countries with a high number of people aged 15 to 64. Interestingly, on an individual level, being older tends to favor depression.

The cross-country econometric analysis also confirms findings of previous research that looked into individual characteristics and the risk of being depressed. Men tend to be less depressed than women. The probability of being depressed is almost 1.6 percentage points lower if a person is male, according to the research.

Those who are married or living as married tend to be less depressed than single people, while those who have experienced marital break-up or widowhood are more likely to be depressed than single people and/or married people. Furthermore, being divorced (an experience that may imply conflict with another person) registers a higher negative impact than being widowed.

Not surprisingly, negative life experiences such as being unemployed also increase the probability of being depressed. The study shows that the effect is relatively high, increasing the probability of being depressed by approximately 3.7 percentage points.

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