Government of Malawi’s unconditional cash transfer improves youth mental health

We explore the impacts of Malawi’s national unconditional cash transfer program targeting ultra-poor households on youth mental health. Experimental findings show that the program significantly improved mental health outcomes. Among girls in particular, the program reduces indications of depression by about 15 percentage points. We investigate the contribution of different possible pathways to the overall program impact, including education, health, consumption, caregiver’s stress levels and life satisfaction, perceived social support, and participation in hard and unpleasant work. The pathways explain from 46 to 65 percent of the program impact, advancing our understanding of how economic interventions can affect mental health of youth in resource-poor settings. The findings underline that unconditional cash grants, which are used on an increasingly large scale as part of national social protection systems in Sub-Saharan Africa, have the potential to improve youth mental wellbeing and thus may help break the vicious cycle of poverty and poor mental health.