Religious belief has psychological benefits
Religious belief is associated with several positive psychological effects. This includes:
- providing hope and better coping with adversity 
- improved happiness  and life satisfaction 
- reducing chance of suicide 
- reducing risk of depression 
- helping cope with bereavement 
- reduction in risky behaviours in teenagers, such as drugs, alcohol and sex,  
- marriage stability 
- greater pride from doing good, greater gratitude from benefiting from good actions 
Religion is also associated with some negative psychological effects and religious upbringing has been compared to child abuse.
Showing belief is associated with positive psychological effects does nothing to demonstrate the truthfulness of religion (i.e. it is an appeal to consequences).
However, some claims of some positive associations with religiosity are generally borne out in scientific studies, such as life satisfaction, well being, hope, optimism, avoiding risky behaviours and coping with adversity. 
"[religious beliefs] must exorcise the terrors of nature, they must reconcile men to the cruelty of Fate, particularly as it is shown in death, and they must compensate them for the sufferings and privations which a civilized life in common has imposed on them"
In the US, the #11 happiest country in 2013 , some studies show that religious people are happier than atheists. However, more secular countries are happier overall, particularly in Scandinavia. The happiness effect in the US may be explained by atheists suffering discrimination. 
Improved happiness is not caused by the belief per se but is rather the product of being part of a social group with common values:
- "It's not their spirituality, belief in heaven, or even the ritual act of praying or going to a house of worship that leads the pious to happiness. Rather, the study found, it's the close friends people gain through their religions that makes a difference. "
Happiness as a validation of religion was famously criticised by George Bernard Shaw:
- "The fact that a believer is happier than a skeptic is no more to the point than the fact that a drunken man is happier than a sober one. The happiness of credulity is a cheap and dangerous quality of happiness, and by no means a necessity of life."
Associating virtue with happiness was criticised by Friedrich Nietzsche who claimed that "happiness equals instinct":
- "I want to understand what idiosyncrasy begot that Socratic idea that reason and virtue equal happiness — that most bizarre of all equations which is [...] The most general formula on which every religion and morality is founded is: 'Do this and that, refrain from this and that — and then you will be happy! And if you don't...' Every morality, every religion, is based on this imperative; I call it the original sin of reason, the immortal unreason."
Positive mental health
Some scientific studies have found a positive association between positive mental health (including reduced risk of depression or suicide) and religiosity, while others found no connection. Patterns are complicated by their occurrence in one gender and not another, or in one country and not any other.  This implies there are complex interactions between cultures and religious beliefs.
While previous small studies have had mixed findings, a large cross-cultural study in 2013 of 8318 people in seven countries found evidence that religious belief was connected to depression in some contexts. While the effect varied depending on the country, with some showing no effect or small differences, there was a statistically significant connection in the UK between religious belief and major depression.  They were not able to reproduce the effect of improved coping being linked with religious belief. The strength of the belief was also linked with the likelihood of depression.
There is no clear pattern between religiosity and divorce rates. 
Religion undermines self esteem
Religious doctrine is a mixture of assuring and undermining concepts than can play havoc with an individual's self esteem. This is one of the harms that are caused by religion on believers. For instance, while explaining Matthew 5.3 :
"when we come to God, we must realize our own sin and our spiritual emptiness and poverty. We must not be self-satisfied or proud in our hearts, thinking we don’t really need God."
There is no clear pattern in scientific studies that have investigated religion and self-esteem.  Religious self worth in later life was found to be best among those who are very religious or very non-religious but worst among those with moderate or little religiosity.  This may be an engineered effect which creates a barrier to a gradual transition away from religion.
Undermining of self esteem is aggressively used in religious cults to make believers dependent on the cult. 
- Phil Zuckerman, Atheism, Secularity, and Well-Being: How the Findings of Social Science Counter Negative Stereotypes and Assumptions, Sociology Compass 3/6 (2009): 949–971, 10.1111/j.1751-9020.2009.00247.x
- Emily Sohn, Why Are Religious People Happier?, Dec 7, 2010
- Patricia Casey, Psycho-Social benefits of Religious Practice
- Macrina Cooper-White, So Much For Religious People Being More Righteous, Huffington Post, 09/17/2014
- Dave Niose, Misinformation and facts about secularism and religion, March 30, 2011
- Friedrich Nietzsche, Twilight of the Idols, 1889
- MJ Donahue, PL Benson, Religion and the well‐being of adolescents, Journal of Social Issues, 1995
- Neal Krause, Religiosity and Self-Esteem among Older Adults, J Gerontol B Psychol Sci Soc Sci (1995) 50B (5): P236-P246. doi: 10.1093/geronb/50B.5.P236