IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp16237.html
   My bibliography  Save this paper

The Effects of an Unconditional Cash Transfer on Mental Health in the United States

Author

Listed:
  • Pignatti, Clemente

    (ILO International Labour Organization)

  • Parolin, Zachary

    (Bocconi University)

Abstract

Mental health conditions have worsened in many countries in recent decades. The provision of unconditional cash transfers may be one effective policy strategy for improving mental health, but causal evidence on their efficacy is rare in high-income countries. This study investigates the mental health consequences of the 2021 Child Tax Credit (CTC) expansion, which temporarily provided unconditional and monthly cash support to most families with children in the United States (US). Using data from the Behavioral Risk Factor Surveillance System, the largest health-related survey in the US, we exploit differences in CTC benefit levels for households with younger versus older children. More generous CTC transfers are associated with a decrease in the number of reported bad mental health days. The effect materializes after the third monthly payment and disappears when the benefits are withdrawn. The CTC's improvement of mental health is larger for more credit-constrained individuals, including low-income households, women, and younger respondents.

Suggested Citation

  • Pignatti, Clemente & Parolin, Zachary, 2023. "The Effects of an Unconditional Cash Transfer on Mental Health in the United States," IZA Discussion Papers 16237, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp16237
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp16237.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Luca Braghieri & Ro'ee Levy & Alexey Makarin, 2022. "Social Media and Mental Health," American Economic Review, American Economic Association, vol. 112(11), pages 3660-3693, November.
    2. William N. Evans & Craig L. Garthwaite, 2014. "Giving Mom a Break: The Impact of Higher EITC Payments on Maternal Health," American Economic Journal: Economic Policy, American Economic Association, vol. 6(2), pages 258-290, May.
    3. Arday, D.R. & Tomar, S.L. & Nelson, D.E. & Merritt, R.K. & Schooley, M.W. & Mowery, P., 1997. "State smoking prevalence estimates: A comparison of the behavioral risk factor surveillance system and current population surveys," American Journal of Public Health, American Public Health Association, vol. 87(10), pages 1665-1669.
    4. Elizabeth Ananat & Benjamin Glasner & Christal Hamilton & Zachary Parolin, 2021. "Effects of the Expanded Child Tax Credit on Employment Outcomes: Evidence from Real-World Data," Poverty and Social Policy Brief 20414, Center on Poverty and Social Policy, Columbia University.
    5. Kuhn, Andreas & Lalive, Rafael & Zweimüller, Josef, 2009. "The public health costs of job loss," Journal of Health Economics, Elsevier, vol. 28(6), pages 1099-1115, December.
    6. Petra Persson & Maya Rossin-Slater, 2018. "Family Ruptures, Stress, and the Mental Health of the Next Generation," American Economic Review, American Economic Association, vol. 108(4-5), pages 1214-1252, April.
    7. Jens Ludwig & Greg J. Duncan & Lisa A. Gennetian & Lawrence F. Katz & Ronald C. Kessler & Jeffrey R. Kling & Lisa Sanbonmatsu, 2013. "Long-Term Neighborhood Effects on Low-Income Families: Evidence from Moving to Opportunity," American Economic Review, American Economic Association, vol. 103(3), pages 226-231, May.
    8. Kevin Milligan & Mark Stabile, 2011. "Do Child Tax Benefits Affect the Well-Being of Children? Evidence from Canadian Child Benefit Expansions," American Economic Journal: Economic Policy, American Economic Association, vol. 3(3), pages 175-205, August.
    9. Amy Finkelstein & Sarah Taubman & Bill Wright & Mira Bernstein & Jonathan Gruber & Joseph P. Newhouse & Heidi Allen & Katherine Baicker, 2012. "The Oregon Health Insurance Experiment: Evidence from the First Year," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 127(3), pages 1057-1106.
    10. V. Joseph Hotz & John Karl Scholz, 2006. "Examining the Effect of the Earned Income Tax Credit on the Labor Market Participation of Families on Welfare," NBER Working Papers 11968, National Bureau of Economic Research, Inc.
    11. Damon Jones & Ioana Marinescu, 2022. "The Labor Market Impacts of Universal and Permanent Cash Transfers: Evidence from the Alaska Permanent Fund," American Economic Journal: Economic Policy, American Economic Association, vol. 14(2), pages 315-340, May.
    12. Cornelius Christian & Lukas Hensel & Christopher Roth, 2019. "Income Shocks and Suicides: Causal Evidence From Indonesia," The Review of Economics and Statistics, MIT Press, vol. 101(5), pages 905-920, December.
    13. Sun, Liyang & Abraham, Sarah, 2021. "Estimating dynamic treatment effects in event studies with heterogeneous treatment effects," Journal of Econometrics, Elsevier, vol. 225(2), pages 175-199.
    14. Matthew W. Ridley & Gautam Rao & Frank Schilbach & Vikram H. Patel, 2020. "Poverty, Depression, and Anxiety: Causal Evidence and Mechanisms," NBER Working Papers 27157, National Bureau of Economic Research, Inc.
    15. Zachary Parolin & Elizabeth Ananat & Sophie Collyer & Megan Curran & Christopher Wimer, 2023. "The Effects of the Monthly and Lump-Sum Child Tax Credit Payments on Food and Housing Hardship," AEA Papers and Proceedings, American Economic Association, vol. 113, pages 406-412, May.
    16. Johannes Haushofer & Jeremy Shapiro, 2016. "The Short-term Impact of Unconditional Cash Transfers to the Poor: ExperimentalEvidence from Kenya," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 131(4), pages 1973-2042.
    17. Kevin Milligan, 2005. "Subsidizing the Stork: New Evidence on Tax Incentives and Fertility," The Review of Economics and Statistics, MIT Press, vol. 87(3), pages 539-555, August.
    18. Anna Aizer & Shari Eli & Joseph Ferrie & Adriana Lleras-Muney, 2016. "The Long-Run Impact of Cash Transfers to Poor Families," American Economic Review, American Economic Association, vol. 106(4), pages 935-971, April.
    19. Collin, Daniel F. & Shields-Zeeman, Laura S. & Batra, Akansha & White, Justin S. & Tong, Michelle & Hamad, Rita, 2021. "The effects of state earned income tax credits on mental health and health behaviors: A quasi-experimental study," Social Science & Medicine, Elsevier, vol. 276(C).
    20. Petra Persson & Maya Rossin-Slater, 2018. "Family Ruptures, Stress, and the Mental Health of the Next Generation: Reply," American Economic Review, American Economic Association, vol. 108(4-5), pages 1256-1263, April.
    21. Boyd-Swan, Casey & Herbst, Chris M. & Ifcher, John & Zarghamee, Homa, 2016. "The earned income tax credit, mental health, and happiness," Journal of Economic Behavior & Organization, Elsevier, vol. 126(PA), pages 18-38.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Clemente Pignatti & Zachary Parolin, 2024. "The effects of an unconditional cash transfer on parents' mental health in the United States," Health Economics, John Wiley & Sons, Ltd., vol. 33(10), pages 2253-2287, October.
    2. Luca Braghieri & Ro'ee Levy & Alexey Makarin, 2022. "Social Media and Mental Health," American Economic Review, American Economic Association, vol. 112(11), pages 3660-3693, November.
    3. Matthew W. Ridley & Gautam Rao & Frank Schilbach & Vikram H. Patel, 2020. "Poverty, Depression, and Anxiety: Causal Evidence and Mechanisms," NBER Working Papers 27157, National Bureau of Economic Research, Inc.
    4. Marta Golin, 2022. "The effect of broadband Internet on the gender gap in mental health: Evidence from Germany," Health Economics, John Wiley & Sons, Ltd., vol. 31(S2), pages 6-21, October.
    5. Mari, Gabriele, 2023. "Less for more? Cuts to child benefits, family adjustments, and long-run child outcomes in larger families," SocArXiv e3n82, Center for Open Science.
    6. Michaela Paffenholz, 2024. "Adolescents’ Mental Health and Human Capital: The Role of Socioeconomic Rank," CRC TR 224 Discussion Paper Series crctr224_2024_526, University of Bonn and University of Mannheim, Germany.
    7. Lauren E. Jones & Guangyi Wang & Tansel Yilmazer, 2022. "The long‐term effect of the Earned Income Tax Credit on women's physical and mental health," Health Economics, John Wiley & Sons, Ltd., vol. 31(6), pages 1067-1102, June.
    8. Reader, Mary, 2023. "The infant health effects of starting universal child benefits in pregnancy: Evidence from England and Wales," Journal of Health Economics, Elsevier, vol. 89(C).
    9. Gabriella Conti, 2013. "The Developmental Origins of Health Inequality," Research on Economic Inequality, in: Health and Inequality, volume 21, pages 285-309, Emerald Group Publishing Limited.
    10. Reader, Mary, 2023. "The infant health effects of starting universal child benefits in pregnancy: evidence from England and Wales," LSE Research Online Documents on Economics 118458, London School of Economics and Political Science, LSE Library.
    11. Malmendier, Ulrike M. & Borgschulte, Mark & Guenzel, Marius & Liu, Canyao, 2020. "CEO Stress, Aging, and Death," CEPR Discussion Papers 14933, C.E.P.R. Discussion Papers.
    12. Chen, Xi & Wang, Tianyu & Busch, Susan H., 2019. "Does money relieve depression? Evidence from social pension expansions in China," Social Science & Medicine, Elsevier, vol. 220(C), pages 411-420.
    13. Alloush, Mo & Bloem, Jeffrey R., 2022. "Neighborhood violence, poverty, and psychological well-being," Journal of Development Economics, Elsevier, vol. 154(C).
    14. Chloe N. East & Sarah Miller & Marianne Page & Laura R. Wherry, 2023. "Multigenerational Impacts of Childhood Access to the Safety Net: Early Life Exposure to Medicaid and the Next Generation's Health," American Economic Review, American Economic Association, vol. 113(1), pages 98-135, January.
    15. Anna Raute & Andrea Weber & Galina Zudenkova, 2022. "Can public policy increase paternity acknowledgement? Evidence from earnings-related parental leave," Working Papers 937, Queen Mary University of London, School of Economics and Finance.
    16. Roychowdhury, Punarjit, 2024. "Social Identity and Depression Among the Elderly: Evidence from India," GLO Discussion Paper Series 1466, Global Labor Organization (GLO).
    17. Mateus Dias & Luiz Felipe Fontes, 2024. "The Effects of a Large-Scale Mental Health Reform: Evidence from Brazil," American Economic Journal: Economic Policy, American Economic Association, vol. 16(3), pages 257-289, August.
    18. Guldi, Melanie & Hamersma, Sarah, 2023. "The effects of pregnancy-related Medicaid expansions on maternal, infant, and child health," Journal of Health Economics, Elsevier, vol. 87(C).
    19. Lukas Kiessling & Jonathan Norris, 2020. "The Long-Run Effects of Peers on Mental Health," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2020_12, Max Planck Institute for Research on Collective Goods.
    20. Angelucci, Manuela & Bennett, Daniel M, 2021. "The Economic Impact of Depression Treatment in India," IZA Discussion Papers 14393, Institute of Labor Economics (IZA).

    More about this item

    Keywords

    child tax credit; mental health; public policy;
    All these keywords.

    JEL classification:

    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp16237. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.