Local Economic Inequality and Depression: Evidence From Longitudinal Data on Local Residential Contexts and...

We studied the consequences of economic inequality for depression among adults using individual-level longitudinal administrative data from Denmark (n = 60,654,690 person time points). The data allow us to (a) measure depression without nonresponse (by proxy of redemption of prescriptions for antidepressants), (b) measure income inequality at a low level of aggregation to capture individuals' everyday experiences, (c) conduct within-individual analyses from stable individual characteristics to address confounding, and (d) test whether inequality has similar consequences for people located differently in the local income distribution. In contrast to previous work, we found a modest negative average effect of economic inequality (a 1-SD increase in inequality is associated with a 1%-2% relative decrease in the probability of depression). However, this average masks substantial heterogeneity: The negative effect was confined to the locally relatively well-off, whereas those with the lowest relative income tended to become more depressed as inequality rose.