The COVID-19 pandemic and entrepreneurs’ depression: quasi-experimental evidence from China

The COVID-19 pandemic has been associated with widespread psychological distress, yet evidence on its impact on entrepreneurs, a group inherently exposed to high uncertainty and work stress, remains limited. This study leverages the pandemic as a quasi-natural experiment to investigate the association between the pandemic and depression among entrepreneurs in China and to trace the dynamic trajectory of this relationship. Using longitudinal data from four waves (2016, 2018, 2020, 2022) of the China Family Panel Studies (CFPS), we employed propensity score matching and an event-study design to construct a comparable control group and estimate the differential changes in entrepreneurs’ depressive symptoms associated with the pandemic. Heterogeneity analyses were conducted across age groups, marital status, entrepreneurship type, regional policy stringency, and symptom dimension. Quantile regression was further performed to examine distributional effects and domain-specific patterns. Robustness checks included alternative PSM algorithms, sample restrictions, categorical outcome specifications, and Poisson estimation. Entrepreneurs, particularly those without social security coverage, experienced a significant short-term increase in depressive symptoms in 2020 relative to matched non-entrepreneurs. This adverse difference attenuated to statistical insignificance by 2022, suggesting transient psychological distress followed by recovery. The proportion of entrepreneurs exceeding the clinical depression threshold (CES-D ≥ 9) increased from 17.0% in 2018 to 21.9% in 2020, a relative increase of 29.0%. Quantile regressions revealed that the difference was largest at the upper tail of the depression distribution, disproportionately affecting those already at higher mental health risk. Heterogeneity analyses showed that young entrepreneurs, married entrepreneurs, employer entrepreneurs, and those in high-stringency regions faced greater psychological strain. Symptom decomposition further indicated that negative symptoms persisted longer than anhedonia. The COVID-19 pandemic was associated with a significant but transient deterioration in entrepreneurs’ mental health, highlighting their psychological resilience over the medium term. The pronounced heterogeneity across subgroups underscores that vulnerability is shaped by the intersection of individual resources, motivational context, environmental severity, and symptom-specific pathways. These findings call for targeted, short-term psychological and economic support for vulnerable entrepreneurial subgroups during major crises, with differentiated strategies by age, marital status, business structure, regional policy context, symptom trajectory, and social security coverage, alongside broader efforts to integrate mental health into post-pandemic recovery policies.