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"Mental health, well-being and lasting economic outcomes are intimately connected. However, in geographies marked by fragility, conflict and violence, entrepreneurs of small and medium-size experience chronic stress and poor mental health on a regular basis."

This paper describes the incremental effects of a five-week group cognitive behavioral training program—over and above the effect of receiving cash grants—on reducing depression and anxiety, as well as improving well-being among small and medium-size enterprise entrepreneurs in conflict-affected parts of Pakistan. Entrepreneurs in the treatment group received the intervention as well as cash grants, whereas those in the control group received only cash grants.

The study, which was conducted with 235 entrepreneurs, found that cognitive behavioral training leads to significant improvements in mental health outcomes in the short run. Three months after the intervention, analysis of pooled data across two follow-up rounds (at five weeks and three months after) show that entrepreneurs in the treatment group experience statistically significant (at the 10 percent level) reduction in the intensity and prevalence of depression and anxiety symptoms (measured by the Patient Health Questionnaire Anxiety and Depression Scale) and higher levels of well-being (measured by the five-item World Health Organization Well-being Index) compared with the control group. Entrepreneurs in the treatment arm experienced a substantial decline in the odds of experiencing depression and anxiety compared with those in the control group, although the results are statistically significant only when the data are pooled. 

This Knowledge Note is a condensed form of the Policy Research Working Paper titled, Group-Based Cognitive Behavioral Training Improves Mental Health of SME Entrepreneurs : Experimental Evidence from Conflict-Affected Areas of Pakistan. To learn more, please access the full paper here