Cash transfers and the mental health of young people: Evidence from South Africa's child support grant.

This study examines the longitudinal impact of the South African Child Support Grant (CSG) on risk for depression and life satisfaction among young people (15-19 years). We analysed data from the last three waves of the National Income Dynamics Study (NIDS), a nationally representative panel survey that took place every two years from 2008 to 2017. We used an instrumental variable (IV) approach that exploits multiple changes in age eligibility from 1998 to 2012. Depressive symptoms were assessed using an 8-item version of the Centre for Epidemiological Studies Depression Scale; participants who scored above 8 were considered at risk for depression. Life satisfaction was rated on a scale of 1 ('very dissatisfied') to 10 ('very satisfied'); participants who scored 8 or above were classified as satisfied. We also examined impacts on educational deficit (≥2 years behind) and not being in education, employment or training (NEET) as secondary outcomes, as these are also important for mental health. Age eligibility strongly predicted CSG receipt at Wave 3. In instrumental variable models, CSG receipt did not influence the risk for depression (β = 0.10, SE = 0.10, p = 0.316), nor life satisfaction (β = -0.07, SE = 0.09, p = 0.420) at Wave 3, nor at Waves 4 or 5. Some improvements in educational deficit were observed at Wave 3 among CSG beneficiaries compared to non-beneficiaries. These results were robust to multiple specifications. CSG receipt did not improve the psychological wellbeing of adolescents and young adults, nor did it improve their education or employment outcomes. Our findings highlight the need to identify alternative social policies that address the root causes of youth social disadvantage, in conjunction with targeted approaches to improve the mental health of young South Africans living in poverty.