Does Welfare Participation Improve Life Satisfaction? Evidence from Panel Data in Rural China

Abstract

Using recent national longitudinal survey data from the China Family Panel Studies in 2012 and 2014 and a combination of propensity score matching and difference-in-differences methods, this article examines the association between China’s rural Dibao program participation and recipients’ life satisfaction and explore how perceived social status and confidence about future might mediate this relationship. We also investigate and compare these effects and mediation pathways across young, middle-aged, and older adults. We find robust positive effect of rural Dibao participation on recipients’ life satisfaction and persistent mediation effects of both perceived social status and confidence about future in this relationship in the full sample. The analysis among different age groups revealed heterogenous life satisfaction effects of rural Dibao participation and different psychological mediation effects in this relationship. The empirical evidence from this article suggests that welfare programs such as rural Dibao can help improve recipients’ subjective well-being. Nevertheless, measures to remove welfare stigma and enhance in-kind supports are needed to help the poor achieve greater subjective well-being, especially among middle-aged adults whose work and family support needs are often difficult to be met.