Using recent national longitudinal survey data from the China Health and Retirement Longitudinal Study (CHARLS) in 2018 and 2020 and a combination of propensity score matching and difference-in-differences (PSM-DID) methods, this study examines the association between participation in China's Dibao program-one of the largest cash transfer initiatives in the world-and the mental health of older adults. The findings reveal that Dibao participation has a significant positive effect on the mental health of older adults. Moreover, the positive effects of Dibao on older adults' mental health are more pronounced among males, younger older adults, those with urban hukou and individuals not living alone. Participation in social activities and intergenerational interactions appear to be two potential mechanisms through which Dibao receipt influences older adults' mental health. This study highlights the potential of cash transfer programs like China's Dibao not only as safety nets but also as tools to address the growing mental health challenges faced by ageing populations.

Liu Qian, Luo Yaping, Ge Hongxi, Han Huawei (corresponding author). Does welfare participation improve older adults' mental health? Evidence from Dibao program in China [J]. Journal of Asian Public Policy, Oct 2025, DOI: 10.1080/17516234.2025.2571684