An analysis of the effects of cash transfer programmes on adult mental health in Low- and Middle-Income Countries

UoM administered thesis: Phd

  • Authors:
  • Julius Ohrnberger


There is a substantial gap in the literature about the effects of poverty alleviation programmes on the mental health of the adult population from Low- and Middle-Income Countries (LMICs). In three empirical chapters, this thesis aims to understand the effects of cash transfers on the mental health of the poor adult population living in two LMICs. In the first empirical chapter I investigate the effects and Net Monetary Benefits of a short-term randomised controlled conditional cash transfer trial in Malawi on mental health. I find a statistically significant positive average treatment effect of 1.1 units, which is approximately a quarter of a standard deviation in mental health. A Quantile Treatment Effect analysis shows a statistically significant increase of 4.3 units for the lowest mental health quantile. The gains from the one-off transfer are worth US$38 per person for individuals with the lowest levels of mental health. In the second empirical chapter I use the South African Child Support Grant to investigate the long-term effect of an unconditional cash transfer on adult mental health. I find a statistically significant positive treatment average effect of half a unit on a 30-point scale on mental health of adults living in poverty. The effects are heterogeneous by gender, by the years of transfer receipt and along the mental health distribution. In the third empirical chapter I conceptualise and estimate a framework that unpacks the mediating pathways between the cash transfer and mental health. Using the same programme as in the second empirical chapter, I find that 16% of the positive effect of the cash transfer on mental health was realised through improvements in physical health and lifestyle factors. When using decomposition analysis, the mediator effects reduce from 16% to six per cent as I account for unobserved mediator effects and assume full mediation of the programme effect on mental health. My results suggest that both conditional and unconditional cash transfers can be powerful tools in promoting better mental health among adults in a low-income setting. Mediation analysis shows that individuals use cash transfers to make positive investments in mental health.


Original languageEnglish
Awarding Institution
Award date1 Aug 2019