Spend More, Feel Better? Investigating the impact of social policy expenditure on the severity of individual depressive symptoms throughout Europe

Abstract: Depression has recently been highlighted across OECD countries as a public health crisis in need of immediate action. Unfortunately, the most popularized public policy solutions focus on individual biomedical or psychosocial interventions. This thesis draws from a theory on economic determinants of mental health to explore if within-country increases in social protection policy expenditure levels over time can affect individuals' depressive symptom outcomes. We use cross-sectional panel data across three rounds of the European Social Survey and state-level social protection expenditure data from the OECD Social Expenditure database for 16 countries across three years (2006/12/14). We operationalize 8 survey questions from the ESS panel data into a depression score for three different sample populations (N’s = 30064, 21309, & 91859). We interact the depression score with country-level social protection expenditure data in 14 fixed effects regressions. Results show that increases in the expenditure level of a majority of state-level social policy programs have a small inverse relationship with individuals’ depressive symptom outcomes within the countries we have observed. Thus, within-country increases in social protection expenditure levels have a mitigating effect on individual-level depressive symptoms within that country's population.