Association for Public Policy Analysis & Management

Living in extreme poverty is considered a chronic stressor whereby households are faced with the issues of food security, paying school expenses and medical bills. In order to protect oneself against the consequences of chronic stressors people search for coping strategies and the help of their social support network. Coping strategies and social support can give immediate relief from acute issues such as day-to-day expenses, but they also help to reduce stress affecting long-term physical and mental well-being. In other words, social support and coping mechanisms have the potential to buffer the effects of poverty on individual’s well-being.

Governments throughout sub-Saharan Africa have introduced unconditional cash transfer programs to address problems of structural poverty. While cash transfers are positively associated with for instance consumption, school attendance and food security, less is known about the interaction between cash transfer programs and the existing social support and coping strategies. If cash transfer programs crowd-out or replace pre-transfer social support or coping mechanisms the net effect of the policy may be reduced or nullified. In other words, the replacement of informal support by government support may not result in a change in stress and well-being. However, if the cash transfer program complements households initial coping strategies household members may increase their buffer against the negative effects of poverty and reduce chronic stress levels.

This study analyzes the relationship between the Social Cash Transfer (SCT) program, an unconditional cash transfer program, coping strategies, and individual’s well-being in rural Malawi. We use the longitudinal impact evaluation data from this government-sponsored program. This study uses a mixed-methods approach whereby the quantitative analysis is supported by qualitative findings to give more depth to the interpretation. In the quantitative analysis we use a difference-in-differences (DD) estimation to uncover the relationship between the unconditional cash transfer and coping, measured through assistance after experiencing a shock, and the use positive and negative coping strategies after a shock. Additionally, we explore the role of coping mechanisms on the relationship between the cash transfer program participation and individual’s perceived stress levels using a difference-in-difference-in-differences (DDD) estimation. All estimations are adjusted using individual level fixed effects. The qualitative analysis concentrates on the narratives of change in participants perceived changes in social support and coping strategies since the introduction of the cash transfer program.

Preliminary results show that the beneficiaries of the program were more likely to apply positive coping strategies and less likely to use negative coping strategies after the introduction of the cash transfer. Also, program participants were less likely to receive unconditional support from family, friends and local non-governmental organizations after having been exposed to shocks. Results of the DDD estimation suggests that beneficiaries, who applied more positive coping strategies, experienced higher stress reduction. Program participants, who received support from family, friends and NGOs showed a negative effect on stress.