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How does employment influence mental health and wellbeing among refugees?

CID faculty affiliate Reshmaan Hussam and co-authors Erin M. Kelley, Gregory Lane, and Fatima Zahra investigated the psychosocial benefits of employment beyond income, specifically in the context of Rohingya refugees in Bangladesh. The researchers conducted a randomized controlled trial with 745 refugees, offering participants either cash payments, employment, or no intervention to isolate the non-monetary value of work.

Key Findings:

• Psychosocial Benefits of Employment: Employment improved mental health and wellbeing significantly more than cash alone. Participants in the employment arm showed a 0.21 increase on a psychosocial index, which includes measures of depression, stress, life satisfaction, self-worth, sense of stability, and sociability. Depression symptoms decreased by 0.24 standard deviations, a larger reduction than seen in other mental health interventions in similar settings.
• Employment vs. Cash: While both the employment and cash groups received the same financial compensation, only employment led to substantial improvements in wellbeing. Cash alone had a negligible effect, suggesting that the experience of employment itself generates improvements in mental health.
• Willingness to Work for Free: Nearly 70% of employed participants expressed willingness to work for free after the trial, indicating that they valued the psychosocial aspects of employment itself.

Policy Implications:

This study underscores the unique psychosocial benefits of employment, revealing that work provides displaced individuals with a sense of purpose and well-being that cash transfers alone cannot achieve. For refugees facing extended displacement, structured work may offer a rare opportunity to reclaim agency, routine, and self-worth in a setting often characterized by uncertainty and idleness. By demonstrating that employment enhances mental health more effectively than cash transfers, the research challenges traditional views on financial aid, suggesting that integrating work opportunities into aid programs may yield deeper, more sustained improvements in wellbeing.

The findings are particularly relevant for humanitarian and development organizations working with vulnerable populations, where policies often prioritize immediate financial support. The study indicates that work-based programs could amplify the positive impacts of aid by addressing both economic and psychosocial needs, helping individuals to feel valued and connected. In restrictive labor markets, like those in refugee camps, where work is limited or even prohibited, advocating for employment rights could be key to fostering resilience and improving mental health for displaced communities.

On a broader level, this research speaks to the value of employment in any context where work options are scarce, from post-conflict zones to rural poverty. As automation and economic shifts reduce traditional labor opportunities worldwide, understanding the intrinsic benefits of work becomes essential for designing policies that preserve human dignity and psychological health. This study highlights that work itself—beyond its financial function—can serve as a foundational component of social and individual well-being, pointing to the potential for workfare and community-oriented employment programs as pathways to fostering mental resilience and social cohesion across diverse populations.