Titus Galama, Robson Morgan, Juan E. Saavedra

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.

JEL Codes
H53: National Government Expenditures and Welfare Programs
I30: Welfare and Poverty: General
I32: Measurement and Analysis of Poverty
I38: Welfare and Poverty: Government Programs; Provision and Effects of Welfare Programs
O38: Technological Change: Government Policy
O54: Economywide Country Studies: Latin America; Caribbean
subjective well-being
evaluation of social programs
score assignment rule