Locked down in Distress: a Causal Estimation of the Mental-Health Fallout from the COVID-19 Pandemic

An extensive literature documents the economic impacts of the Covid-19 pandemic, while a nascent one is beginning to detail the mental health impact. A limitation with existing work is that reported findings generally cannot be taken as causal estimates. In this study, we use a large-scale longitudinal survey coupled with a differences-in-differences research design to estimate the impact of the COVID-19 pandemic on mental health. We report substantive increases in psychological distress for the population overall during the first wave. These impacts were, however, not uniformly distributed with the costs in terms of mental health being much more pronounced for females, younger cohorts, the BAME community, and migrants. A further unique feature of our study is that we looked to understand why people underwent such a significant decline in mental health. Our analysis would suggest that financial worries, health anxiety, social isolation, and crowding stress all played an important role.