Wealthier, Happier and More Self-Sufficient: When Anti-Poverty Programs Improve Economic and Subjective Wellbeing at a Reduced Cost to Taxpayers

58 Pages Posted: 6 Dec 2017

See all articles by Titus J. Galama

Titus J. Galama

USC Center for Economic and Social Research

Robson Morgan

University of Southern California

Juan Saavedra

University of Southern California - Department of Economics; Center for Economic and Social Research (CESR)

Date Written: November 2017

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.

Suggested Citation

Galama, Titus J. and Morgan, Robson and Saavedra, Juan, Wealthier, Happier and More Self-Sufficient: When Anti-Poverty Programs Improve Economic and Subjective Wellbeing at a Reduced Cost to Taxpayers (November 2017). NBER Working Paper No. w24090. Available at SSRN: https://ssrn.com/abstract=3082273

Titus J. Galama (Contact Author)

USC Center for Economic and Social Research ( email )

Playa Vista, CA
United States
+310 430 6358 (Phone)

Robson Morgan

University of Southern California ( email )

2250 Alcazar Street
Los Angeles, CA 90089
United States

Juan Saavedra

University of Southern California - Department of Economics ( email )

3620 South Vermont Ave. Kaprielian (KAP) Hall, 300
Los Angeles, CA 90089
United States

Center for Economic and Social Research (CESR)

635 Downey Way
Los Angeles, CA 90089-3332
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
20
Abstract Views
196
PlumX Metrics