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Cash Transfers, Mental Health and Agency: Evidence from an RCT in Germany

Author

Listed:
  • Sandra Bohmann
  • Susann Fiedler
  • Maximilian Kasy
  • Jürgen Schupp
  • Frederik Schwerter

Abstract

Mental health and wellbeing are unequally distributed in high-income countries, disadvantaging low-income individuals. Unconditional, regular, and guaranteed cash transfers may help address this inequality by promoting financial security and agency. We conducted a preregistered RCT in Germany, where treated participants received monthly payments of EUR 1,200 for three years. Cash transfers improve mental health and wellbeing. These effects are substantively large and robust. Cash transfers also improve perceived autonomy, savings, prosocial giving, time with friends, and sleep. Our findings suggest that cash transfers improve mental health and wellbeing if they empower agency and meaningful life changes.

Suggested Citation

  • Sandra Bohmann & Susann Fiedler & Maximilian Kasy & Jürgen Schupp & Frederik Schwerter, 2025. "Cash Transfers, Mental Health and Agency: Evidence from an RCT in Germany," CESifo Working Paper Series 11989, CESifo.
    • Handle: RePEc:ces:ceswps:_11989
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    File URL: https://www.ifo.de/DocDL/cesifo1_wp11989.pdf
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    More about this item

    Keywords

    cash transfers; mental health; life satisfaction; purpose in life; agency; autonomy; life changes;
    All these keywords.

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • D10 - Microeconomics - - Household Behavior - - - General

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