Decoding the mental health of informal workers in the Global South: An integrated State-Neighborhood-individual framework

The COVID-19 pandemic underscores the critical role of neighborhood and national contexts in shaping the mental health of informal workers, a group that accounts for 90 % of the workforce in the Global South. Yet, existing research has largely focused on the role of individual-level factors. Based on first-hand questionnaire data from Bangladesh, China, India and the Philippines, this study proposes an integrated State-Neighborhood-Individual framework to examine how subjective neighborhood deprivation interacts with state capacity in shaping the mental health of informal workers. Results show that: 1) Informal workers experience significantly poorer mental health than formal workers in the Global South during COVID-19, highlighting the health inequalities driven by employment informality. 2) Informal employment exacerbates subjective neighborhood deprivation, which, in turn, negatively affects mental health. 3) The mediating effects of subjective neighborhood deprivation vary across countries due to different state capacities. Higher state capacity (as in China and the Philippines) mitigates its negative impact. This study indicates that advancing SDG 3 (Good health and well-being) in the post-pandemic era is contingent upon fulfilling SDG 8 (Decent work and economic growth) and SDG 11 (Sustainable cities and communities). Promoting inclusive and resilient neighborhoods and enhancing constructive state embeddedness are vital for improving the psychological well-being of vulnerable groups and further fostering health equality.