Can Targeted Poverty Alleviation Program Reduce Depression? Evidence From China

Objectives This study aimed to examine whether China's Targeted Poverty Alleviation (TPA) program mitigates depression and explores the mechanisms through which the TPA program affects individuals' depression.Methods Using the data from the China Family Panel Studies (CFPS) survey from 2012 to 2020, we employ a Difference-in-Difference model to analyze the effect of the TPA program on individuals' depression levels.Results Our findings indicate that the TPA program reduces depression scores by 0.116 points, accounting for 6.82% of the standard deviation of depression scores. Further analyses indicate that these effects are mediated through improvements in local medical conditions, reductions in household healthcare spending, increases in household entertainment expenditures, and greater likelihood of living in family.Conclusion This study showed that the TPA program significantly mitigates individuals' depression levels. The possible channels include (1) improving local medical conditions, (2) cutting down household healthcare spending, (3) increasing household entertainment expenses, and (4) increasing the likelihood of living in family.