Cash transfers improve sleep quality for household heads but not other family members, revealing how financial pressures burden those responsible for providing.
Picture this: it's 2 AM and while the rest of the household sleeps peacefully, the family breadwinner lies awake, mind racing with financial worries. How will they cover next month's expenses? What if someone gets sick? This scenario plays out nightly in millions of households worldwide, but we rarely consider sleeplessness as a consequence of poverty.
Our research (Duquennois and Jagnani 2025) leveraging Indonesia's cash transfer announcement in 2014 reveals a striking pattern: when poor households anticipated receiving financial assistance, household heads—typically the breadwinners—experienced dramatic improvements in sleep quality. However, other family members saw no change. This finding opens a window into understanding how financial concern affects different household members and why addressing these stressors matters for development policy.
A natural experiment in understanding the impact of financial relief
In November 2014, Indonesia announced an unconditional cash transfer of IDR 400,000 (around US$30) to provide a buffer for poor households against fuel subsidy cuts. This represented roughly 25% of monthly expenses for typical recipients. The timing was fortuitous as the transfers occurred while a national household survey—collecting detailed sleep quality data from over 18,000 individuals—was being conducted.
This created an ideal natural experiment. Using a sharp regression discontinuity design, we compared households surveyed just before versus just after the November 17 announcement, when eligible families could begin collecting their transfers.
Cash transfers dramatically improve sleep and cognition
We find that only those identified by their families as household heads, the person ‘responsible for satisfying daily necessities’, showed sleep improvements. Household heads in eligible families surveyed immediately after the transfer announcement reported:
- 0.4 standard deviation (SD) improvement in sleep quality
- 0.3 SD improvement in falling asleep
- 0.38 SD improvement in concentration attributed to better sleep
These were not just self-reported improvements. Cognitive tests revealed enhanced performance on memory tasks (0.18-0.19 SD) with surveyors noting that these household heads were more attentive during lengthy interviews.
Remarkably, spouses and adult children in the same households showed no sleep improvements whatsoever, even though they would presumably benefit from the household's improved financial situation.
Why is the effect limited to breadwinners?
In Indonesian households, the household head typically shoulders primary earning responsibility, contributing 52% of household income on average compared to just 12% from spouses.
Our analysis revealed that sleep quality improvements occurred only for those with high earning responsibilities, irrespective or age or gender. Even when spouses managed household budgets, they did not experience sleep benefits unless they also contributed substantially to household earnings. This suggests the burden of providing, rather than managing money, drives sleep-disrupting financial anxiety.
Following the money: How does cash alleviate financial concerns?
What explains this pattern? By tracking how households used the transfers, we uncovered the mechanism: rather than spending on food or consumer goods, recipient households immediately increased savings, including contributions to informal microfinance groups, and reduced outstanding loans.
This financial cushioning appeared to ease the unique pressures on breadwinners. Household heads reported feeling significantly less worried, frustrated, and tired after the transfer. While other household members showed no such improvements in emotional well-being.
Policy implications for poverty reduction
These findings carry important implications for anti-poverty policy:
1. Hidden costs of poverty: While a growing body of evidence has shown that concerns about finances have broad psychological consequences (Haushofer and Fehr 2014, Schilbach et al. 2016, Duquennois 2022, Kaur et al. 2024), sleep deprivation represents an underappreciated burden of financial insecurity. Poor sleep impairs cognitive function, workplace productivity, and health outcomes—potentially trapping families in poverty (Banks and Dinges 2007, Gibson and Shrader 2018, Bessone et al. 2021, Jagnani 2022). Policymakers should consider these psychological and physiological costs when designing poverty reduction efforts.
2. Differential household impacts: These psychological and physiological costs may be differentially shared by different household members. Programmes aimed at improving outcomes for women or children may need to consider how household dynamics and cultural norms shape the distribution of both financial stress and relief.
While our study focuses on Indonesia, the breadwinner's burden likely extends across cultures where individuals bear primary responsibility for their family's economic security. In contexts ranging from single-parent households in developed countries to extended families in traditional societies, those who shoulder financial responsibility may suffer unique psychological costs.
References
Banks, S and D Dinges (2007), “Behavioral and physiological consequences of sleep restriction,” Journal of Clinical Sleep Medicine, 3: 519–528.
Bessone, P, G Rao, F Schilbach, H Schofield, and M Toma (2021), “The economic consequences of increasing sleep among the urban poor,” The Quarterly Journal of Economics, 136(3): 1887–1941.
Duquennois, C (2022), “Fictional money, real costs: Impacts of financial salience on disadvantaged students,” American Economic Review, 112(3): 798–826.
Duquennois, C and M Jagnani (2025), “Breadwinner's burden: The effect of financial concerns on sleeplessness,” American Economic Review: Insights, forthcoming.
Gibson, M and J Shrader (2018), “Time use and productivity: The wage returns to sleep,” The Review of Economics and Statistics, 100(5): 783–798.
Haushofer, J and E Fehr (2014), “On the psychology of poverty,” Science, 344(6186): 862–867.
Jagnani, M (2022), “Children's sleep and human capital production,” The Review of Economics and Statistics, July 2024.
Kaur, S, S Mullainathan, S Oh, and F Schilbach (2024), “Do financial concerns make workers less productive,” The Quarterly Journal of Economics, 140(1): 635-689.
Schilbach, F, H Schofield, and S Mullainathan (2016), “The psychological lives of the poor,” American Economic Review: Papers and Proceedings, 106(5): 435–440.