The Effect of Safety Net Generosity on Maternal Mental Health and Risky Health Behaviors

A generous safety net may improve mental health outcomes and stress-related health behaviors for single mothers by promoting financial security, but stigma and hassle associated with welfare use could offset some of these gains. We use a simulated safety net eligibility approach that accounts for interactions across safety net programs and relies on changing policies across states and time to identify causal effects of safety net generosity on psychological distress and risky behaviors of single mothers. Our results suggest that a more generous safety net is protective of maternal mental health: we estimate that a $1000 increase to the combined cash and food benefit package reduces severe psychological distress by 5.5 percent. Breaking out effects by individual programs while still controlling for potential benefits from other programs, we find that this reduction is entirely due to simulated tax credit eligibility and appears to occur in the first half of the year, when such benefits are typically received. We find no significant effect of the overall safety net on risky behaviors like smoking and heavy drinking, but this masks offsetting effects of cash and food benefits, suggesting that the impact of improved financial resources depends on details of transfer program design