Does Welfare Enable Family Expenditures on Human Capital? Evidence from China

Using the national China Household Income Project 2007 urban survey data and a propensity score matching method, this article investigates whether welfare receipt helped enable low-income families to spend more on human capital. We find that welfare recipient families prioritized spending in health and education relative to their non-recipient peers. Welfare particularly helped poor families afford medical care, medicine, tuition and fees for noncompulsory education, private tutoring for children, and purchasing of textbooks. We find some evidence that welfare helped recipient families pay for maintenance fees for their residence, but receiving welfare also deterred families from having leisure activities.