Happiness and Alleviation of Income Poverty : Impacts of an Unconditional Cash Transfer Programme using a Subjective Well-Being Approach

Abstract

This study analyzes the impact of an exogenous, positive income shock on caregivers’ subjective well-being in Malawi using panel data from 3,365 households targeted to receive Malawi’s Social Cash Transfer Programme that provides unconditional cash to ultra-poor, labour-constrained households. The study consists of a cluster-randomized, longitudinal design. After the baseline survey, half of these village clusters were randomly selected to receive the transfer and a follow-up survey was conducted 17 months later. Utilizing econometric analysis and panel data methods, we find that household income increases from the cash transfer can have substantial subjective well-being gains among caregivers. Households use the cash to improve their families’ livelihoods, ensuring provision of their basic needs including food, shelter, and clothing. Reduction of these daily stresses makes caregivers happier about their current situations and gives them hope that the future will continue to get better.