Discussion paper

DP17309 The Long-Run Effects of Psychotherapy on Depression, Beliefs, and Economic Outcomes

We revisit two clinical trials that randomized depressed adults in India (n=775) to a brief course of psychotherapy or a control condition. Four to five years later, the treatment group was 11 percentage points less likely to be depressed than the control group. The more effective intervention averted 9 months of depression on average over five years and cost only $66 per recipient. Therapy changed people’s beliefs about themselves in three ways. First, it reduced their likelihood of seeing themselves as a failure or feeling bad about themselves. Second, when faced with a novel work opportunity, therapy reduced over-optimistic belief updating in response to feedback and thus reduced overconfidence. Third, it increased self-assessed levels of patience and altruism. Therapy did not increase levels of employment or consumption, possibly because of other constraints on employment in the largely female study sample.

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Citation

Bhat, B, J de Quidt, J Haushofer, V Patel, G Rao, F Schilbach and P Vautrey (eds) (2022), “DP17309 The Long-Run Effects of Psychotherapy on Depression, Beliefs, and Economic Outcomes”, CEPR Press Discussion Paper No. 17309. https://cepr.org/publications/dp17309