While the benefits of cash transfers are well documented, little attention has been given to the negative effects of their cessation, particularly on mental health. We examined this question using South African longitudinal survey data comprising 7899 unique adolescents tracked as they age out of the Child Support Grant , the country’s largest cash transfer. We find that loss of the Child Support Grant leads to a decline in mental health equivalent to 0.42 of a standard deviation in the CES-D score, robust across model specifications and falsification tests. Increased job search activity points to resource mobilisation as a plausible mechanism, consistent with the Conservation of Resources framework. Effects are concentrated among adolescents in urban areas and households with lower and less diversified income. The results point to a neglected aspect of social protection: how and when cash transfers are withdrawn, particularly when this coincides with critical life stages.
Khumalo et al. (Mon,) studied this question.