Background: Mental health and social exclusion are increasingly recognized as intertwined public health challenges. The aftermath of the COVID-19 underscores the need to integrate psychological well-being into national development and social inclusion agendas. Evidence and causal analyses from Southeast Asia remain sparse. Design and methods: This study combines longitudinal descriptive trends from the Indonesian Family Life Survey with an instrumental variable probit regression using cross-sectional data and examines the causal relationship between mental health and key dimensions of social exclusion: employment status and community participation. To address potential endogeneity and bidirectionality, “family mental health history” was employed as an instrumental variable, offering a theoretically plausible and statistically valid proxy for exogenous variation in individual mental health. Results: Descriptive findings showed that poorer mental health was associated with lower levels of e
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