Mental health and workforce participation in India: A gendered analysis

Abstract

Depression adversely affects labor market outcomes globally. In low- and middle-income countries like India, where informal employment is prevalent and mental health services are limited, poor mental health may be associated with substantial economic disadvantages. However, large-scale empirical evidence remains limited, especially on gendered patterns. This study examines the association between depression and employment among midlife adults (ages 45–60) in India and explores how this relationship varies by gender and socio-economic status. Using nationally representative data from the Longitudinal Ageing Study in India (Wave 1), we analyze 27,092 individuals reporting current working status. Depression is measured using the Composite International Diagnostic Interview–Short Form via both continuous scores and threshold-based cutoffs. To account for potential endogeneity, we employ a control function approach and probit-2SLS models, with parental psychiatric history and number of confidants as instruments. Gender-disaggregated and subgroup analyses cover income and education levels. Depression is associated with lower likelihood of employment, even at subclinical levels. The gender gap in employment is narrow among the depressed; the pattern is consistent with distress-driven employment and constrained agency. The counterintuitive narrower gender disparity among the depressed—largely driven by disadvantaged women—contrasts with conventional expectations about India’s labor market. Integrating gender-sensitive mental health support into employment and social protection programs, even for subclinical cases, may be relevant to protect vulnerable workers, reduce economic insecurity, and promote equitable workforce participation.