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Paying for Happiness: Experimental Results from a Large Cash Transfer Program in Malawi

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  • Kelly Kilburn
  • Sudhanshu Handa
  • Gustavo Angeles
  • Maxton Tsoka
  • Peter Mvula

Abstract

This study analyzes the short‐term impact of an exogenous, positive income shock on caregivers’ subjective well‐being (SWB) in Malawi using panel data from 3,365 households targeted to receive Malawi's Social Cash Transfer Program that provides unconditional cash to ultra‐poor, labor‐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 was conducted 17 months later. We find that the short‐term impact of household income increases from the cash transfer leads to substantial SWB gains among caregivers. After a year's worth of transfers, caregivers in beneficiary households have higher life satisfaction and are more likely to believe in a better future. We examine whether program impacts on consumption, food security, resilience, and hopefulness could explain the increase in SWB but do not find that any of these mechanisms individually mediate our results.

Suggested Citation

  • Kelly Kilburn & Sudhanshu Handa & Gustavo Angeles & Maxton Tsoka & Peter Mvula, 2018. "Paying for Happiness: Experimental Results from a Large Cash Transfer Program in Malawi," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 37(2), pages 331-356, March.
    • Handle: RePEc:wly:jpamgt:v:37:y:2018:i:2:p:331-356
    DOI: 10.1002/pam.22044
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    Cited by:

    1. Huawei Han & Qin Gao, 2020. "Does Welfare Participation Improve Life Satisfaction? Evidence from Panel Data in Rural China," Journal of Happiness Studies, Springer, vol. 21(5), pages 1795-1822, June.
    2. Livani, Talajeh & Graham, Carol, 2019. "Do social protection programs improve life satisfaction? Evidence from Iraq," World Development Perspectives, Elsevier, vol. 16(C).
    3. Francesco Bogliacino & Cristiano Codagnone & Frans Folkvord & Francisco Lupiáñez-Villanueva, 2023. "The impact of labour market shocks on mental health: evidence from the Covid-19 first wave," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 40(3), pages 899-930, October.
    4. Andersen, Asbjørn G. & Kotsadam, Andreas & Somville, Vincent, 2022. "Material resources and well-being — Evidence from an Ethiopian housing lottery," Journal of Health Economics, Elsevier, vol. 83(C).
    5. Haushofer, Johannes & Chemin, Matthieu & Jang, Chaning & Abraham, Justin, 2020. "Economic and psychological effects of health insurance and cash transfers: Evidence from a randomized experiment in Kenya," Journal of Development Economics, Elsevier, vol. 144(C).
    6. McGuire, Joel & Kaiser, Caspar & Bach-Mortensen, Anders, 2020. "The impact of cash transfers on subjective well-being and mental health in low- and middle- income countries: A systematic review and meta-analysis," SocArXiv ydr54, Center for Open Science.

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