Heterogenous Mental Health Impacts of a Forced Relocation: The Red Zone in Christchurch (New Zealand)

People are sometimes forced to move, and it is plausible that such relocation involves significant psychological costs. The challenge in identifying the mental health consequences of moving is that most moves are (at least partly) voluntary so that the sample of movers is self‐selected. We focus on a natural experiment, the government‐mandated relocation of some households after all households experienced an exogenous shock. We use this experiment to identify the causal impact of moving on people's mental health, distinguishing between less severe and more severe health conditions, and between individuals with pre‐existing mental health conditions and those without. The event we focus on is the 2011 Christchurch (New Zealand) earthquake, and the consequent decision of the government to relocate about 8000 households from some of the earthquake‐affected areas. We use a comprehensive administrative dataset that includes health records with information on hospital attendance, specialist services, and prescribed medications for (almost) every resident in the city and compare the relocated individuals to those who lived elsewhere in the earthquake‐damaged city. We examine both the likelihood of receiving mental health treatment (the extensive margin), and the intensity of treatment, measured by the number of visits to a clinic or hospital (the intensive margin). We find a statistically significant increase in the likelihood and frequency of receiving treatment for moderate mental health problems among individuals compelled to relocate, when compared to other residents of the earthquake‐affected city who were allowed to remain in situ. This increase persisted to December 2013 for everyone, and remained significant for the elderly to the end of 2018. We found no such increase in health care utilisation for more severe mental health symptoms that required more acute interventions (in clinics or hospitals).