The effect of cash transfers on mental health – New evidence from South Africa

Julius Ohrnberger, Eleonora Fichera, Matt Sutton, Laura Anselmi

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BACKGROUND: Mental health and poverty are strongly interlinked. There is a gap in the literature on the effects of poverty alleviation programmes on mental health. We aim to fill this gap by studying the effect of an exogenous income shock generated by the Child Support Grant, South Africa's largest Unconditional Cash Transfer (UCT) programme, on mental health. METHODS: We use biennial data on 10,925 individuals from the National Income Dynamics Study between 2008 and 2014. We exploit the programme's eligibility criteria to estimate instrumental variable Fixed Effects models. RESULTS: We find that receiving the Child Support Grant improves adult mental health by 0.822 points (on a 0-30 scale), 4.1% of the sample mean. CONCLUSION: Our findings show that UCT programmes have strong mental health benefits for the poor adult population.

Original languageEnglish
Article number436
Pages (from-to)436
Number of pages1
JournalBMC Public Health
Issue number1
Publication statusPublished - 3 Apr 2020


  • Cash transfer
  • Fixed effects
  • Instrumental variable estimation
  • Mental health
  • Poverty
  • South Africa

ASJC Scopus subject areas

  • Public Health, Environmental and Occupational Health


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