The interesting question is this: does being a JW:
A) cause mental illness, or does it
B) attract unbalanced individuals.
The answer is probably:
C) Both.
However, the prevalence of mental health issues among those "born-in" strongly suggests that there are things about the beliefs system itself that causes mental health problems. We must keep in mind the axiom that correlation does not prove causation.
Ok, that was me, the scientist, talking. Now it's just me, the regular Joe: There is no eff-ing way that believing lies and falsehoods can be good for your mental health!
Squashing doubts--and once you go beyond doubting to knowing that the WT is full of lies and falsehoods--and pretending to believe things that you do not believe merely to avoid being expelled from the group, these things are soul destroying. It crushes a person's true identity.
Humans are social animals. We need to belong. But when we succumb to social pressure to the point of sacrificing our individual identity on the altar of beliefs that we ourselves do not hold we suffer a form of psychic death. This is clearly a form of mental illness. I'd have to do some research, but off the top of my head I would say it's a form of dissociative identity disorder. As I recall, Steven Hassan has written extensively on this subject related to cults in general. It's the replacement of the individual's authentic identity with the cult identity.