Income Shocks and Suicides: Causal Evidence From Indonesia

Abstract

We examine how income shocks affect the suicide rate in Indonesia. We use a difference-in-differences approach, exploiting the cash transfer’s nationwide roll-out, and corroborate the findings using a randomized experiment embedded in the program roll-out. Our estimates from the nationwide roll-out show that the cash transfers reduce the yearly suicide rate by 0.36 per 100,000 people, corresponding to an 18 percent decrease. Moreover, a different type of income shock, variability in agricultural productivity, also affects the suicide rate. The cash transfer program reduces the causal impact of the agricultural productivity shocks, suggesting an important role for policy interventions. Finally, we provide evidence for a psychological mechanism by showing that agricultural productivity shocks affect depression.