The impacts of cash transfers on mental health and investments: Experimental evidence from Mali

Stress and cognitive burden associated with poverty constrain decision-making regarding in-vestments in the future, which can in turn perpetuate poverty. We exploit the randomized roll-out of Mali's national cash transfer program to estimate its impact on measures of psychological and emotional well-being, time preferences, and cognitive function among households' primary decision-makers. We find that receiving transfers reduced decision-makers' self-reported stress and worry, as well as improved their self-esteem. The program did not affect measures of cognitive function but led to a modest increase in a measure of patience. Consistent with reduced stress, improved self-esteem, and increased patience, the program also increased investments in productive assets. Results suggest that, in addition to cash transfers providing the economic re-sources to support investments in the future, they may also build psycho-social well-being for supporting these investments.