Working Paper: NBER ID: w24090
Authors: Titus J. Galama; Robson Morgan; Juan E. Saavedra
Abstract: We document how an anti-poverty program improves economic and subjective wellbeing, and self-sufficiency. Familias en Accion Urbano, a conditional cash transfer program implemented at scale in the country of Colombia, uses a means-test cutoff score selection rule that provides exogenous variation in program participation. We reproduce the score assignment rule in a nationally representative living standards household survey that measures multiple dimensions of economic and evaluative wellbeing. Three years into the program, beneficiary households at the margin report greater income, consumption and formal employment participation for both the household head and partner. Household income increased by ten times the amount of the government transfer, likely because of gains in formal employment. Beneficiary households at the margin also report greater overall satisfaction with life, greater happiness and greater satisfaction with food. These results support the hypothesis that among households with basic unmet needs, policies that have a permanent impact on income and consumption may also have a lasting impact on subjective wellbeing and self-sufficiency. Moreover, relatively small subsidies, further offset by additional government tax receipt, may generate substantial benefits to poor families at a reduced cost to taxpayers.
Keywords: Antipoverty programs; Conditional cash transfers; Subjective wellbeing; Economic wellbeing
JEL Codes: H53; I30; I32; I38; O38; O54
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Household income (D19) | Subjective wellbeing (I31) |
| Mean-test score (C52) | Program participation (H53) |
| Program participation (H53) | Household income (D19) |
| Program participation (H53) | Formal employment participation (J29) |
| Program participation (H53) | Overall satisfaction with life (I31) |
| Program participation (H53) | Happiness (I31) |
| Program participation (H53) | Satisfaction with food (D18) |