The Impacts of Cash Transfers on Subjective Wellbeing and Poverty: The Case of Colombia

Abstract

Cash transfer programs have been the main social policy in the fight against poverty and inequality in Latin-American countries. This paper analyzes the impacts of the program Mas Familias en Accion on the perception of poverty and subjective wellbeing in Colombia. The analyses are based on data from the Encuesta Nacional de Calidad de Vida between 2008 and 2016. Two empirical strategies were compared to account for the lack of randomness in groups of beneficiary and non-beneficiary families: (i) non-experimental designs (linear and nonlinear models with cross-sectional and pooled data); (ii) quasi-experimental designs (Propensity Score Matching and Inverse Probability Weighted Regression Adjustment). The results were robust to the different empirical strategies and emphasized that: (i) transfers increase the perception of food insecurity and subjective poverty; (ii) conditionalities involve positive impacts on different indicators of subjective wellbeing, especially health and education; (iii) general impacts on the perceptions of life are nonsignificant, as a result of divergent impacts on the dimensions of the subjective wellbeing of families.