Covid-19 Cash Transfers and Well-Being: Quasi-Experimental Evidence from Russia

This paper investigates the causal impact of direct cash transfers on health, well-being, and life satisfaction during the COVID-19 pandemic in Russia. Motivated by the mixed findings in the existing literature, we propose a novel hypothesis: that the effectiveness of COVID-19 cash transfers is conditional on the severity of the pandemic. Our quasi-experimental design takes advantage of a unique empirical setting at the onset of the COVID-19 pandemic in Russia, particularly of three features: 1) the introduction of unconditional COVID-19 cash transfers for children of a specific age, allowing a sharp age-discontinuity design by comparing marginally eligible and marginally ineligible adolescents; 2) the availability of an annual longitudinal survey that enables a difference-in-difference approach (by controlling for the pre-pandemic level of outcome variables); 3) the onset of the COVID-19 wave coinciding with the timing of the survey as a quasi-natural experiment randomizing the experience with the pandemic among the respondents within the same location. The main finding is a significant positive effect of cash transfers on the financial situation, life satisfaction, and self-assessed health of the transfer-eligible adolescents. Yet, these effects are conditional to the severity of pandemic outbreaks experienced by the respondents. Placebo tests confirm the validity of our results. Regarding the adult household members, we find minor positive but statistically insignificant spillover effects.