The Hidden Cost of Coping Strategies on Mental Health

Economic and health shocks are known to affect young people’s mental health, but evidence on the mediating role of coping strategies, particularly in low- and middle-income countries, remains limited. We investigate this relationship specifically on depression and anxiety in individuals aged 19–26 across Ethiopia, India, Peru, and Vietnam. Using data from the Young Lives longitudinal study and employing Generalized Structural Equation Modelling, we show that: financial stress directly increases anxiety and depression among young people; depression is further aggravated when respondents seek help from family and friends or incur debt from third parties; conversely, assistance from the government and NGOs, as well as direct changes in consumption behaviour, do not increase anxiety or depression. These results suggest that strengthening formal support systems and reducing reliance on informal or debt-based coping could help mitigate mental health risks for young people facing shocks.