Assessing the effect of the COVID-19 SRD grant on recipients' mental health

Morwane, Keletso
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The South African government responded to the Covid-19 global pandemic by implementing containment measures (in the form of lockdowns) to mitigate the spread of the Covid-19 virus. This has devastated the economy, put a strain on an already fragile labour market, and deteriorated mental health and poverty. Consequently, the government put together social protection measures and expanded their social grant programme to cover unemployed adults. This study investigates the impact that the Covid-19 Social Relief of Distress (SRD) grant – a measure aimed at reducing the pandemic-induced financial shock on households – has on recipients’ mental health. Using the PSM estimation approach, the ATT is assessed over time by analysing waves 2, 3 and 5 of NIDS-CRAM as separate cross sections. Since socioeconomic issues cause depression, the study is compelled to ascertain whether receipt of the grant lowers depressive symptoms. The study is further motivated by literature that highlights the increase in poor mental health that is induced by a range of factors brought on by the pandemic. The results for waves 3 and 5 are statistically insignificant thereby creating difficulty in highlighting their implications. Wave 2’s results indicate that receipt of the grant lowers the likelihood of displaying depressive symptoms and the result is significant. This positive impact obliges the study to suggest that the government should consider making the policy permanent
A Research Report submitted in partial fulfilment of the Degree of Master of Economic Science to the Faculty Commerce, Law and Management, School of Economics and Finance, University of the Witwatersrand, 2022