How social assistance affects subjective Well-being: Lessons from Kyrgyzstan
Franziska Gassmann, Bruno Martorano & Jennifer Waidler
#2021-013
This paper investigates the effects of social assistance on subjective
well-being looking at the case of Kyrgyzstan. For this purpose, we
exploit recent changes in the design of social assistance and apply a
difference in difference (DiD) method combined with an inverse
probability weighting (IPW) technique. In contrast to the existing
literature, we find that the receipt of social assistance benefits is
associated with lower levels of subjective well-being. Our findings also
reveal that participation in social assistance leads to some reduction
in satisfaction regarding recipients' own economic conditions. Moreover,
we find that the negative effects on subjective well-being disappear for
the oldest generations, which experienced the dissolution of the Soviet
Union. By contrast, the effect is negative for the youth, who grew up in
a new society where needing help is ultimately the responsibility of the
individual citizen. For individuals with high trust in political
institutions, the negative effect of state intervention does not hold,
while it persists in case of low trust in political institutions.
Keywords: subjective well-being, social assistance, institutional trust,
Soviet Union, Kyrgyz Republic
JEL Classification: I31, I38, P36