Cash Works Better Than Therapy: Economic vs. Psychological Aid
Unconditional cash transfers prove more effective than brief psychotherapy in improving both economic and psychological well-being in poor communities.
What This Study Is About
A randomized controlled trial (RCT) in rural Kenya (5,756 individuals) comparing the effects of a $1076 cash transfer, a five-week psychotherapy program (PM+), and a combination of both.
💡 Mindeln Tip
Address your basic needs first. When you're financially stressed, focus on security before self-improvement. Stability enables growth.
Key Insights
Cash Transfers Win: After one year, cash recipients showed higher consumption, assets, revenue, and significantly higher psychological well-being than the control group.
Therapy's Null Effect: The five-week psychotherapy program (PM+) had no measurable effects on either psychological or economic outcomes, even for individuals with poor mental health at the start.
Combination Effect: The combined cash + therapy group's results were similar to those of the cash-only group, indicating the therapy added no benefit.
Cost-Effectiveness: The study concludes that cash transfers were more cost-effective (cheaper and more impactful) in improving both economic and psychological outcomes than the PM+ intervention.
The findings suggest that alleviating financial stress (poverty) acts as a powerful and direct mental health intervention.
The Full Story
The study demonstrates that in contexts of extreme poverty, addressing fundamental economic needs through unconditional cash transfers is superior to a targeted, short-term psychological intervention for improving overall well-being. The economic safety net provided by cash acts as a buffer against psychological distress.
Original Research Source
View the original research paper to dive deeper into the methodology, data, and findings.
View Original Paper