Unconditional cash transfer and youth well-being: evidence from a Korean policy experiment

Purpose This paper investigates the impact of Korea’s youth allowance program on the subjective well-being of young recipients. The program provides a unique empirical context to evaluate the effects of a universal, individual-based, and unconditional cash transfer on the mental well-being of youth. Design/methodology/approach Using a unique dataset, we employ both difference-in-differences (DID) and propensity score matching (PSM) methods to estimate the causal effects of the cash allowance program. Our analysis reveals statistically significant improvements in recipients’ well-being following program participation. Findings The positive effects are observed consistently across income groups, highlighting the broad appeal and potential of universal programs. These results contribute to the growing body of evidence supporting unconditional cash transfers as a tool for improving youth well-being and informing future social policy design. Originality/value To address potential selection bias, we complement the DID approach with a PSM method. While PSM has known limitations, the consistency of results across both methods strengthens the credibility and robustness of our findings. This dual-method approach provides more reliable evidence on the program’s effectiveness.