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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, disadvan- taging low-income individuals. Unconditional, regular, guaranteed, and individual 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 wellbe- ing substantially, with effects persisting 18 months after the program ended. 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 em- power agency and 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," Discussion Papers of DIW Berlin 2129, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwwpp:dp2129
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    References listed on IDEAS

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    Keywords

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    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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