Three essays on welfare policies and well-being

Abstract

This dissertation presents the results of a series of studies into the effects of welfare policies on individual well-being. The research objectives are to examine empirical evidence of how national policies affect the objective and subjective well-being of individuals, and to fill the gap between policies at the macro level and individuals at the micro level. This will enable us to further our understanding of the effects of policies to promote a more dignified approach toward the treatment of real life people. This thesis consists of three chapters that fall under the broad banner of welfare policies and well-being. The first essay, The Well-Being Effects of Targeted Cash Transfer Programs for the Elderly: Evidence from Natural Experiments in South Korea, aims to examine the effects of targeted cash transfers with a cutoff for lower economic status on objective and subjective well-being, and to investigate the possible mechanism behind the program. Examining two types of exogenous policy changes, coverage expansion and benefit increase, results clearly show that these cause a crowding out of private transfers, compensating the loss of private transfer to household income, lower life satisfaction, and higher depression of the treated. Focusing on the stigmatizations associated with targeted cash transfer programs, a dignified targeted cash transfer through a non-face-to-face application and a positive media campaign to deliver the policy intention to the public are suggested. The second essay, Unemployment and Subjective Well-Being: The Role of Unemployment Benefit in South Korea, examines the comprehensive effects of unemployment on subjective well-being and the role of unemployment benefits as a public mediator. By examining exogenous entry to unemployment due to plant closure or layoff, it is found that there are negative spillover effects of unemployment on the life satisfaction of the unemployed and their spouses with noticeable gender differences. Unemployment benefit buffers the overall negative effects of unemployment, making it near-zero. The third essay, Individual Perceptions toward the Social Systems, Social Spending and Subjective Well-Being in Europe, is inspired by previous literature showing that welfare state efforts measured by social spending have a near-zero effect on individual experienced utility, or life satisfaction. To fill the gap between individuals and welfare states, the moderating effects of individual perceptions toward the social system are examined. Focusing on European countries, 2002-2015, multidimensional social perceptions mediate the near-zero effect of social spending. This implies that policy-makers should consider how much people trust and perceive the social system to maximize the effects of welfare states.