Objectives Poverty reduction interventions through cash transfers and microcredit have had mixed effects on mental health. In this quasi-experimental study, we evaluate the effect of a living wage intervention on depressive symptoms of apparel factory workers in the Dominican Republic.

Setting Two apparel factories in the Dominican Republic.

Participants The final sample consisted of 204 hourly wage workers from the intervention (99) and comparison (105) factories.

Interventions In 2010, an apparel factory began a living wage intervention including a 350% wage increase and significant workplace improvements. The wage increase was plausibly exogenous because workers were not aware of the living wage when applying for jobs and expected to be paid the usual minimum wage. These individuals were compared with workers at a similar local factory paying minimum wage, 15–16 months postintervention.

Primary outcome measures Workers’ depressive symptoms were assessed using the Center for Epidemiologic Studies-Depression Scale (CES-D). Ordinary least squares and Poisson regressions were used to evaluate treatment effect of the intervention, adjusted for covariates.

Results Intervention factory workers had fewer depressive symptoms than comparison factory workers (unadjusted mean CES-D scores: 10.6±9.3 vs 14.7±11.6, p=0.007). These results were sustained when controlling for covariates (β=−5.4, 95% CI −8.5 to −2.3, p=0.001). In adjusted analyses using the standard CES-D clinical cut-off of 16, workers at the intervention factory had a 47% reduced risk of clinically significant levels of depressive symptoms compared with workers at the comparison factory (23% vs 40%).

Conclusions Policymakers have long grappled with how best to improve mental health among populations in low-income and middle-income countries. We find that providing a living wage and workplace improvements to improve income and well-being in a disadvantaged population is associated with reduced depressive symptoms.