Household Income as Determinant of Child labour and School Enrollment in Brazil: Evidence from a Social Security Reform

Latin America and the Carribean

Brazil

Social Protection

Pension / Social Security

de Carvalho Filho

2012

Irineu Evangelista de Carvalho Filho. 2012. Household Income as Determinant of Child Labor and School Enrollment in Brazil: Evidence from a Social Security Reform. Economic Development and Cultural Change, 60 (2): 339-435.
View publication

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2012

Social security pensions

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The paper exploits a 1991 social security reform that reduced the minimum eligibility age for rural old-age benefits for men from 65 to 60, extended old-age benefits to female rural workers who were not heads of households, and reduced the age at which women qualified for benefits from 65 to 55. Because old-age benefits for rural workers are not subject to either an earnings test or retirement requirement, once a rural worker reaches the minimum eligibility age, there is no gain in delaying filing the application for old-age benefits. The only requirement is to provide the necessary proofs of age and past rural activity.

The reform increased the minimum benefit paid to rural old-age beneficiaries from 50 percent to 100 percent of the minimum wage.

• Children’s work 1: Work for pay in reference week
• Children’s work 2: Hours worked per week
• Education: Enrolled in school

Triple difference regressions

The author exploits the social security reform by comparing rural households that became eligible to receive old-age benefits as a result of the reform (such as households with men aged 60-64) to rural households that were nearly eligible (such as households with men aged 55-59) before and after the reform. To correct for age-specific trends not related to the reform, the author compares these difference-in-differences estimates for rural households to difference-in-differences estimates for urban households (which were not affected by the reform) in a triple difference framework.
The author provides both reduced form estimates that give the effect of having a newly eligible man or woman in the household on children’s work and education, and IV estimates that proxy the effect of benefit receipts or number of benefit receivers on children’s work and education.
Data: The study is based on the 1989, 1990, 1993, and 1995 Pesquisa Nacional por Amostra de Domicílios, an annual household survey, with sample size equal to 1/500 of the Brazilian population (about 100,000 households), designed to produce a picture of the living conditions and economic life of the Brazilian population, rural and urban.

The estimates suggest that the reform affected particularly girls’ enrollment and work. The IV estimates indicate that an increase in benefits of 100 Reais increases girls school enrollment by nearly 10 percentage points and reduces the probability that girls work for pay by 3.6 percentage points. The gender of the benefit receiver appears to matter for girls’ work for pay: only female benefits result in a significant reduction in this outcome variable. Hours worked also decrease significantly only when the benefits are received by women.

Child Labour

Households

National

The reform affected particularly girls’ work. An increase in benefits of 100 Reais reduces the probability that girls work for pay by 3.6 percentage points. The gender of the benefit receiver appears to matter for girls’ work for pay: only female benefits result in a significant reduction in this outcome variable. Hours worked also decrease significantly only when the benefits are received by women.

The estimates suggest that the reform affected particularly girls’ enrollment. The estimates indicate that an increase in benefits of 100 Reais increases girls school enrollment by nearly 10 percentage points. The gender of the benefit receiver appears to matter for girls’ work for pay: only female benefits result in a significant reduction in this outcome variable. Hours worked also decrease significantly only when the benefits are received by women

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