The impact of conditional cash transfer programs on household work decisions in Brazil

Latin America

Brazil

Social Protection

Conditional Cash Transfers (CCT)

Ferro, Kassouf and Levison

2010

Ferro A.R., Ana Lucia Kassouf, and Levison, D., “The Impact of Conditional Cash Transfer programmes on Household Work Decisions in Brazil”, Chapter 7 in Akee, Edmonds and Tatisamos, eds., Research in Labour Economics, Volume 31: Child labour and the Transition between School and Work, 2010.
View publication

-

2010

Bolsa Escola Federal (Scholarship programme)

2001-2003 (integrated into Bolsa Familia starting end of 2003)

To increase educational attainment and to reduce child labour.

Families with children of school-going age (6-15 years) and monthly per capita income no greater than R$90 (43$). Targeting is based on a based on an income-means test and/or a scoring system.

The Bolsa Escola programme was introduced on a national-scale in 2001, building on earlier municipal-level programme initiatives such as the programme for Eradication of Child labour (PETI), the municipal Bolsa-Escola programmes starting in 1996, and the Minimum Income programme (Programa de Garantia de Renda Mínima) of the Ministry of Education in 1999-2000. Benefit structure: R$15 per month per child for a maximum of 3 children. Transfers are given to mothers. Conditions: School attendance at least 85% of school days. The programme was implemented in two stages. First, the Federal government decided, based on a determination of need, the number of federally-financed stipends that a municipality could provide to its population. Second, given this number of stipends, the municipality selected which households would receive the programme from among qualifying beneficiaries. This devolution of the selection process allowed each municipality to target the programme, within the general guidelines, according to its own local objectives and preferences. By late 2003, Bolsa Escola had been implemented in almost all of Brazil’s 5,561 municipalities, providing nearly US$500 million in total stipends paid to over 8.6 million children from 5.06 million families.

• Children’s work: Incidence: in economic activities (total paid and unpaid work)
• Education: School enrolment
• Age range: 6-15 years

Propensity score matching, regression analysis

Sample: The final sample consists of 14,434 children (4,230 controls and 10,204 beneficiaries) of 8,202 parents (2,334 controls and 5,868 beneficiaries). The sample is composed of individuals aged 6-15 years who belong to families with per capita income levels below one-half of one Brazilian minimum wage (or below 120 Reais in September 2003) and declared themselves signed-up for (comparison group) or a beneficiary of (treatment group) the CCT programme and have complete information.
Identification strategy: The paper analyzes the effects of Bolsa Escola on the work decisions of children, mothers, and fathers and on children’s school enrolment after the widespread implementation of the programme in 2001. Treatment and comparison groups are built based on the information in the PNAD. The comparison group includes families that signed-up for the programme but did not actually receive benefits while treatment group includes beneficiaries of the CCT programme. Labour force participation and enrolment equations conditional on cash transfers are estimated using a probit model. Until 2003, the condition for receiving the monthly grants was children’s school attendance. As a consequence, measuring the effects of the Brazilian CCT programme on children’s work and on their parents’ labour using PNAD-2003 is essentially investigating a spillover effect of a programme aimed at increasing education. The paper performs separate estimations for children in urban and rural areas, besides the estimation for the whole sample.
Survey instrument: The 2003 Brazilian annual household survey, Pesquisa Nacional por Amostra de Domicílios or PNAD-2003. The PNAD-2003, unlike previous PNAD survey, allows distinguishing between those who want to be beneficiaries, i.e., those who are waiting for approval to start receiving benefits, and those who actually are beneficiaries and receive their transfers monthly. Indeed, it includes two questions regarding conditional cash transfers. The first asked whether the person was signed-up for a cash transfer programme conditional on education, and the second asked whether the person was actually receiving benefits in the form of cash transfers from such a programme.

Three years after being adopted nationally, the Bolsa Escola CCT programme seems to have had the expected positive effect on school enrolment and negative effect on children’s market work (especially in rural areas). It also increases mother and father participation in the labour force.

Child Labour

Households

National

Cash transfers reduce the probability of work for children but not their time spent in the labour market, and the program is more efficient for girls than for boys.

The program does not change mothers and fathers’ probability of participation in the labour force, but implies in some changes in the time that parents spend on labour market. Rural mothers and urban fathers reduce their working time, either because they need to spend more time with child care under the program or because they can afford more leisure time due to an extra income source. Urban mothers, however, have a longer work week when receiving the transfers.

The negative effect of the programme on children’s work was observed for both urban and rural areas. Participation in Bolsa Escola reduces the probability that a child works by 3 percentage points overall. For those living in urban areas, the effect is a reduction in 2 percentage points and for those living in rural areas, where the percentage of children working is higher, the impact is 6 or 9 percentage points, depending on which estimation method is used. These results obtained for the impact of Bolsa Escola on child labour are different from previous ex-post evaluations, in which the programme showed no effect in reducing child labour (Cardoso and Souza, 2003). It may be that the time span between the implementation of the programme and the evaluation considered in the previous works was not enough to capture significant impacts. The impact of Bolsa Escola on children school enrolment is positive and statistically significant, ranging from 2 percentage points in urban areas up to 4 percentage points in rural areas. The impact is small, but this is not surprising given the high percentage of children already enrolled in school.