Do social protection programs improve life satisfaction? Evidence from Iraq

The social assistance and subjective well-being literature frequently shows “stigma” and “disempowerment” effects accompanying government transfers. These studies posit that the bureaucratic processes of government income assistance programs generate feelings of shame among recipients and adversely impacts their self-assessed well-being; or that being the “passive recipient” of state assistance undermines an individual’s sense of empowerment. We examine whether this theory holds under conditions of instability and conflict. In Iraq, with a recent history of violent conflict and everyday uncertainties, public transfers may play a crucial role in the very survival of Iraqi citizens, and thus strongly predict subjective well-being. Similarly, other sources of income, such as remittances and self-generated income from employment and personal assets, could have positive effects on the self-assessed well-being of Iraqis. Based on the 2012 Iraq Household Survey data, our empirical investigation finds that the source of income and the way in which income is generated matters to individuals, even in situations of extreme economic and political uncertainty. Individuals derive greater satisfaction from public assistance programs and income generation processes that emphasize self-reliance and independence.