Keywords

1 Introduction

Social programs are aimed at segmented sectors according to their needs, whose objective is to reduce the problems of monetary inequality and opportunities, in other words, to improve the welfare of the beneficiaries. However, the effect of these programs on the welfare of the beneficiary population goes far beyond measuring it through socioeconomic indicators such as gross domestic product, poverty rate, GDP per capita, and HDI, since welfare encompasses a very broad concept. Therefore, the subjective perception of the beneficiaries must be considered to verify the real efficiency of a social program applied to a specific population living in poverty [1].

Poverty is a major problem and has social, economic, and political consequences. The concept is quite broad, since it not only implies low-income level (objective indicator) but is also related to low quality of life, social class, labor position, access to basic household services (sanitation, electricity, drinking water), education, health, among many other aspects that relate to the satisfaction of needs of individuals, in other words, the state of well-being or more subjective indicators [1].

In Peru, according to [9], the population identified as living in monetary poverty in 2019 was 20.2%, maintaining a level close to that of 2018, where it reached 20.5%, that is, around 6.4 million inhabitants were living in poverty. Likewise, according to [5], the monetary poverty between 2009 and 2015 decreased nationwide; however, poverty in the rural region is still worrying, with a higher level concentrated in the jungle region and highland region. In accordance with this, the way of measuring monetary poverty in Peru includes families whose spending per person is deficient and unsatisfactory to be able to acquire a set of basic food products and other services (home, clothing, academic training, etc.).

As for the years not considered, which comprise between 2020 and 2022, they were not taken into consideration because, in 2020 and 2021, there was an unexpected change in the time series due to the COVID-19, as a consequence of higher unemployment, quarantines, social isolation, border closure, among others, that increased poverty, according to [12], mentions that in the year 2020, monetary poverty increased ten percentage points compared to 2019, concluding that there was a 10-year setback. This deviates us from the main objective of our research, to identify the effect of social programs on the subjective economic well-being of Junin (2012–2019); and as for the year 2022, there is no annual data for the date of study (first quarter 2022).

There has been a decrease in the level of monetary poverty in Peru in recent years. However, the percentage difference by department remains the same. The regions located in the center and south are the regions with the highest level of poverty and suggest a worrisome socioeconomic issue. Because of this, in the National Household Survey [ENAHO] 2018–2019, grouped the twenty-five national departments according to their level of monetary poverty, in the case of the first group, the percentage exceeds the national average with a minimum of 34.4% and a maximum of 39.4%; on the other hand, the region that maintains the lowest percentage of monetary poverty is Ica between 1.3% and 3.9% which belongs to the fifth group [9].

According to the information, which shows that in 2019, within group three of the departments grouped according to their level of monetary poverty is the region of Junin, with an average between 21.9% and 25.3%. For the years 2007–2016, Junin was in group four, that is, it belonged to a group that presented lower percentages of monetary poverty that were between 14% and 18.1%, which shows that the poverty numbers in Junin have increased, that is why the main objective is to prevent the Junin region and the other departments from having percentages like those of groups one and two [9].

Focusing on the association between social programs and welfare, [22] analyzed the importance of the different social policies implemented in Bolivia through social programs, where they found that the conditional transfer plans did make it possible to reduce poverty and improve social welfare. Similarly, [2] in his objective to know the impact of a Mexican social program because, despite the large amounts of money spent annually by the Mexican government on social programs, it is not possible to know the real impact beyond just the growth indicators, so he considered that it was important to measure the effects in depth. Based on the above, the author determined that the “Prepa Sí” program (education), which was implemented in Mexico City, did contribute to student welfare.

In this sense, after analyzing the implications of social programs, which indicate that subjective well-being can be studied through the perception or assessment of people's well-being, this paper hypothesizes that social planning can increase the subjective well-being of the population in the Junin region.

Therefore, the main objective of this research will be to demonstrate the effectiveness of social programs on the subjective well-being of families in Junin, as well as to recognize the indicators that can be used to measure subjective well-being and to identify which of the social programs studied has the best effect on the subjective well-being of families in Junin.

2 Literature Review

2.1 Welfare Economics

According to [4], welfare economics is a sub-discipline that is based on measuring and quantifying the benefits and costs of the various alternatives that exist for the efficient allocation of scarce resources, as well as investigating the structural bases of economic and social policy. Cost–benefit analysis determines whether the welfare of a given population has improved or not. However, there is no globally accepted criterion for interpreting welfare, since certain actions may improve the welfare of some and harm that of others.

Therefore, to measure well-being, it is necessary to make the sum of improvements in the perception of well-being.

A positive variation in an individual's income will not necessarily produce a significant change in subjective well-being. For example, an increase in GDP will not automatically increase people’s income, since GDP is a broader concept (Pigou, 2005, as cited in [19]).

2.2 Subjective Well-Being

For [3], the concept encompasses a global analysis of the different aspects of an individual's life, understood as an integrated judgment of the individual, but this perception is per period, there is no way to determine which moment is the most appropriate; however, cognitive and affective components can be included as part of scales for measuring the quality of life.

In addition to that, in accordance to [28], subjective well-being is a multifaceted term that encompasses the different perceptions that individuals determine about the reality in which they live, the experiences that occur to them and the decisions they make about their lives. Within this, cognitive elements are manifested as a result lead to the creation of the individual's own judgments in which emotions and impressions intervene. Moreover, [24] mentions that subjective well-being is “an option to the traditions of imputation and presumption of well-being”, this will be based on knowing everyone's perception of one's well-being, and the person must include the concept of well-being, since the fact of encompassing the affective, hedonic, and cognitive experience domains. On the other hand, [18] define it as how a person evaluates in what way satisfied he/she is with his/her life.

In part, well-being does depend on income, but absolute income by itself does not determine subjective well-being. As stated by [18], the increase in the satisfaction that derives from the increase in absolute income happens partly offset when all people in the same reference group perceive an increase in income in the same proportion.

2.3 Determinants of Subjective Well-Being

For Diener, Suh, Lucas and Smith (1999) cited by [8] detail that could include life satisfaction as one of its determinants (desire to change one's life, satisfaction with current life, with the past, with the future, and with how others see our life) and the domains of satisfaction would be work, family, leisure, health, and income.

This subjective well-being encompasses two highly related aspects, the cognitive-emotional analysis and the global analysis, and involves how a person identifies each component of his or her life that influences well-being [8]. Meanwhile, [3] mentions that it is composed of the subjective character, which is defined as the individual's own experience, the global dimension which is an assessment of the state of his or her life, and the inclusion of positive dimensions due to its nature.

In this context, for the analysis of this study, the focus of the determinants of subjective well-being will be related to socioeconomic circumstances. These are the perception of the standard of living and the perception of income behavior, which in turn are measured under five indicators: (1) perceives that he/she lives well with his/her income, (2) perceives that during the last year the standard of living of his/her household improved, (3) perceives that during the last year the standard of living of his/her community improved, (4) perceives that he/she manages to save, and (5) perceives that his/her income is stable.

2.4 Social Programs

According to [27], social programs are an intervention of the state in search of efficiency in the economy, based on the way income is distributed, because no matter how much efficiency there is in the Pareto sense, income distribution may continue to be uneven in society, leaving a certain group with very limited resources. Therefore, the state intervenes by creating these programs to redistribute income to eliminate economic inequality.

Furthermore, [21] mentions that they are plans created from the perspective of the state to reduce poverty. Since their implementation in 1990 in Peru, social programs consisted of two approaches: (a) aimed at fostering labor resources for the eradication of indigence in the long and medium term and (b) aimed at alleviating poverty in the short term by addressing the highest priority that the poorest population requires [5].

The main function of social programs is to grant goods and services with the sole purpose of satisfying the most basic needs of a population in a situation of vulnerable poverty, and they also aim to boost the economic value of the subsidized individuals so that from that they can promote their productive competencies and thus improve their socioeconomic performance  [21].

National Program of Direct Support to the Poorest—Juntos

According to [20] the Peruvian cash transfer program Programa Nacional de Apoyo Directo a los Más Pobres Juntos, initiated in September 2005, is one of the social policies born as a response to the fight against the increase of monetary poverty in Peru, whose main objective is to reduce generational extreme poverty and provide social protection to those Peruvian citizens who cannot access social services such as national health service and/or education service. The purpose of the program is to reduce the consumption probabilities of the families belonging to the program, considering the valuation of their fundamental rights. Likewise, it had as antecedents the international programs that with the same objective and purposes are applied for programs under the name of Opportunities in Mexico and Bolsa Familia in Brazil.

In accordance with [15], the program offers social protection, i.e., benefits such as health, education, nutrition, and equality. Thus, using cash transfers, it encourages the most economically vulnerable families to increase their consumption and investment in human capital in the short term, since in the long term what it seeks is that these transfers or incentives end up eradicating the problem of generational poverty in Peru. Demographically, the Juntos program prioritizes the rural area of the country because it is the population of households that suffer the most from poverty and extreme poverty.

Pension 65

As it points out [16], is a social program of monetary subsidies, it was created in October 2011 and is aimed at adults over 65 years old who have a quality of life in a situation of extreme poverty and their fundamental basic human rights are defended. Its primary function is to look after the economic situation of affiliated older adults belonging to different rural and urban demographic areas. To estimate the correct number of older adults in need of the program, it makes use of the Household Targeting System and identifies the older adults who are most vulnerable physically, economically, and emotionally.

As stated by [14], among the primary purposes of the program, the contribution of making the beneficiaries in extreme poverty feel economically secure stands out, as well as the promotion of physical, psychological, and emotional well-being. In addition, the cooperation and contribution of older adults are encouraged.

3 Methodology

3.1 Data

The ENAHO for the periods 2012–2019 is taken as a reference, which is a data collection program associated with the level of well-being of the population, which makes it possible to monitor the quality-of-life indexes in Peru. According to [11], “it is a survey of law that is executed nationwide, throughout the year”.

The total number of households surveyed using the updated methodology of the ENAHO at the national level is distributed yearly and is seen in Table 1.

Table 1 Household surveyed nationwide
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Likewise, an analysis of the number of households that responded to the subjective well-being dimensions is given in Table 2.

Table 2 Dwellings surveyed according to dimensions
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The data sample represents the Junin region, using filtered data from the ENAHO for the periods 2012–2019. The data are filtered from the Ubigeo that corresponds to the department of Junin (120,000). Thus, the number of households surveyed is given in Table 3, which corresponds to the periods 2012–2019.

Table 3 Households surveyed, Junin
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From which a further filter is made to determine the people who have access to the social programs “Juntos” or “Pension 65”, the new final sample is 881 beneficiaries for Pension 65 and 1249 for Juntos, making a total of 2130.

3.2 Standardization

The independent variables will be both social programs, which are found in the ENAHO format, these are strategies or planning that the state puts forward to mitigate the lack or to intensify important capabilities of a segment of the population [30].

National Program to Help the Poorest—(Juntos) and National Solidarity Assistance Program—(Pensión 65).

The items considered are regarding the receipt of social programs of direct economic support to the poorest and the period of access to the program, including the present.

Within the research, a selection of variables formulated in the ENAHO was made to evaluate the impact of the subjective well-being generated by the two social programs. In this order, the questions considered were the perception of the standard of living, in which the changes or evolutions in the quality of life that the beneficiaries went through are analyzed and the perception of the behavior of income, in which the evolution of the financial situation and income over the years is analyzed (Table 4)

Table 4 Criteria for assessing the impact of subjective well-being
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Between the years 2012 and 2019, filtering the data according to the five sub-dimensions, a single dichotomous variable (well-being) was generated which contains the sum of the five sub-dimensions; if the family perceives 2 or more of the dimensions = 1; 1 or less = 0. In a general way, the variables were filtered by cluster number, housing selection number, and Ubigeo code for the Junin region.

3.3 Development of the Binary Choice Model

To analyze the impact of social programs on subjective well-being in Junin, a binary choice model was used, specifically a Logit model, so we proceeded to convert the variables to dichotomous variables, placing 1 and 0 depending on the favorable results we need to achieve, we performed the regression for the dichotomous variable well-being (subjective well-being) and analyzed whether it is related to access to the “Juntos” and “Pension 65” social programs.

3.4 Components

Mentioned by [26], the binary logistic regression technique or better known as the Logit model is applied if the dependent variable is dichotomous, as it will represent access to social programs (value 1 if accessing the social program and value 0 if not accessing it); the technique also has advantages of robustness, for instance, in the presence of assumptions of normality, and the analysis of results is coincidental to that of linear regression. On the other hand, the Probit model provides the dependence of a group of independent variables on the ordinal response, that is, it analyzes which determinants influence the level of satisfaction of a scale, which is of auxiliary or complementary use to the Logit model. Likewise, [23] mentioned that it is characterized by being nonlinear, in terms of the probability and magnitude of change of the results of the independent variables, also depending on the levels of all these.

Given the dependent variable y:

$$y_{i} = \alpha + \beta x_{i} + \varepsilon_{i}$$

where i is the observation, x is a vector of the variables predicting the model, and finally \(\varepsilon\) is the model error term.

We proceed to divide y into k ordinal categories.

$$y_{i} = m,\quad \text{if}\,\tau_{m - 1} \le y \le \tau_{m} \,\text{to}\,m = 1\,\text{to}\,k$$

where the cutoff points \(\tau_{1}\) to \(\tau_{k - 1}\) are estimated. We assume that \(\tau_{0} = - \infty\) y \(\tau_{k} = \infty\).

3.5 Dimension Scores

To comply with the dichotomy of the model, we proceed:

Variable \(y_{1}\) is the perception that a person lives well on their income, where “Very good” and “Good” will take the value of 1 and 0 otherwise. Variable \(y_{2}\) is the perception that the standard of living of a household improved, where “Improved” will take the value of 1 and 0 otherwise. Variable \(y_{3}\) is the perception that the standard of living in your locality improved, where “Improved” will take the value of 1 and 0 in the opposite case.

The variable \(y_{4}\) is the perception where a person manages to save money, where “Manages to save” money will take the value of 1 and 0 otherwise. Moreover, the variable \(y_{5}\) is the perception whose income is unstable or stable, and “stable” will take the value of 1 and 0 otherwise.

4 Results

In the first regression, the likelihood ratio (LR) of the analysis of variance is 180.67 and has a probability of 0.000, which means that the whole model is significant, since it is less than 0.05, making the variables Juntos and Pension 65 together help explain the variable “Welfare”; the Pseudo R2, which varies in a nonlinear way, is 0.0115, which means that there is a good global adjustment. With respect to the z coefficient, the values are greater than 1.96, implying a greater relevance of the variables. Both variables are significant.

Regarding the marginal results of the variables Juntos and Pension 65, we proceed to multiply the coefficients with the density function, for Juntos it is 0.0431, which results in 0.005; for Pension 65 it is 0.0368, which results in 0.007, the interpretation is that when a family accesses the Juntos and Pension 65 programs, and the subjective well-being does not increase or decrease.

The odds ratio is added to the regression, which serves to analyze the influence of the regressor variables on the regressed variable. The odds ratio should not be close to one or equal to one because there would be no relationship between the variables. If it is greater than one, there is a positive dependence, and if it is less, there is an inverse relationship. For the first regression, the odds ratios are less than one, i.e., there is an inverse relationship between greater access to a social program (Juntos and Pension 65) and how subjective well-being is perceived.

5 Discussion of Results

The subjective well-being variable included five sub-dimensions that allowed us to evaluate the personal perception of each person in the Junin region. It was expected that the implementation of social programs would reflect a positive perception in all areas, however, being a region within group three with monetary poverty, it is not one of the target groups where more emphasis was placed at the time of applying the social programs; therefore, the number of beneficiaries of the programs is lower than in other departments. Therefore, the implementation of the programs did not reflect either satisfaction or dissatisfaction of subjective well-being in the beneficiaries of Junin, in other words, the effect was null.

If we look at a national study, being a user of Pension 65 has a greater impact as time goes by, that is, for each additional 10 months in the program, satisfaction with household income increases. However, the same is not true for the Juntos program, since an additional month in the program does not contribute to increasing the probability of perception of improvement in all indicators that comprise subjective well-being, except for income stability [17]. Our results show that while it is true that the variables explain the model, that is, they are significant, both the “Juntos” social program and “Pension 65” have a null effect (by the magnitude of the probability according to the Logit model) on subjective well-being in Junin between 2012 and 2019.

As for how to measure subjective well-being, according to [7], to effectively measure human well-being, a range of subjective indicators must be considered that reflect all aspects of a person's life and that in effect lead to well-being, which are constructed through surveys that reveal the individual perception of well-being that each person has. Taking this into consideration, in this study we determined in the best possible way the appropriate indicators that allowed us to identify exactly what is the perception of a family’s standard of living and income level. Unlike the “Life Satisfaction Scale” created in 1985 by Diener, which only allows to evaluate life in a general way considering personal standards and includes more an affective balance between positive and negative emotions that a person experiences in a certain period  [6]. Or also the measure of the “Emic Scale” that allows identifying the achievement of needs proposed by a person, which includes factors such as feeling good, good place to live, status and home, which would allow evaluating more the perception with the standard of living that the person has, nevertheless, not corresponding to the trend of their income [6].

Regarding the effect generated by both programs on beneficiaries, after obtaining the results that would help us understand which of the two programs had a better effect on subjective well-being according to the indicators taken for the analysis, it was obtained between the “Juntos” program and “Pension 65”, that the program that maintains a slightly more positive effect on subjective well-being is the “Pension 65” program because on the one hand, verifying the z coefficient, this is greater than that of “Juntos” in absolute terms. On the other hand, in terms of their marginal effects, the effect of the “Pension 65” program is slightly larger than that of the “Juntos” program. However, together the two programs did not reflect either satisfaction or dissatisfaction in subjective well-being. If we compare the results with what was found in the nationwide study by [17], where his results show a positive effect in a greater magnitude for “Pension 65” users, whose benefit from the perception of the beneficiaries represents an important change in their lives. It should be emphasized that in the cities of rural areas, there is the largest number of beneficiaries of social programs, in fact they are around 60 percent and through a targeting mechanism are derived to the same. Although our result shows an almost null effect on subjective well-being, since much depends on the number of beneficiaries for the effect to be total, Junin only represents four percent of the number of “Pension 65” and “Juntos users”. To validate this, national results where there is a positive effect, because the coefficients in the regression are positive, being from the Juntos program (0.32) and Pension 65 (0.11), i.e., social programs do increase the subjective economic well-being of the population.

6 Conclusions

This scientific research has described and analyzed the dimensions of subjective well-being of families in Junin 2012–2019, based on current theory. Different empirical theories suggest that the term well-being should not be based only on economic or objective well-being, since the term encompasses more general well-being  [25].

Through quantitative methodologies in order to obtain generalizable results for the population of Junin, by means of available data, impacts on the variable related to economic satisfaction were identified, this being a variable that contributes to the study of subjective well-being, it should be emphasized that it is not the only one, and in the same way that these conclusions are subject to discussion and could be complemented with studies using qualitative techniques, for example.

Two social programs (Juntos and Pension 65) were evaluated. The specification of the model showed empirical evidence of the existence of the monotonicity property (“more is better”), so the following conclusions were obtained.

We found evidence of the existence of a significant effect of accessing social programs of cash transfers (Pension 65 and Juntos); however, subjective well-being in the Junin region between 2012 and 2019 does not increase or decrease.

On the other hand, the measurement of subjective well-being will be efficient if the levels of happiness are well established, which will allow the identification of groups with serious problems, the monitoring of this trend and the interpretation and analysis of why some people are happy and others are not. In this sense, over time it will be possible to identify what matters to people and to what extent [13].

In summary, it has been shown that the general hypothesis which mentions that the programs have a positive effect on subjective well-being in the families of Junin between 2012 and 2019 are rejected. Therefore, there are still dissatisfactions due to factors that should be identified in more in-depth studies.