The Impact of Conditional Cash Transfer Programs on Household Work Decisions in Brazil

Andrea R. Ferro, Universidade de São Paulo and University of Minnesota
Alexandre Nicollela, Universidade de São Paulo

Conditional Cash Transfer (CCT) programs have become widespread in developing and underdeveloped countries as a way to alleviate current poverty and provide investments in human capital that could lead families to better life conditions in the long-term. The first goal is accomplished when poor families receive money from governments on a monthly basis, as a complementary income source. The second goal is reached by conditioning the cash transfers on certain behaviors, such as enrolling children in school. However, these programs may also have impact on time use decisions within beneficiaries, particularly with respect to time spent working. We aim to measure the impact of Brazilian conditional cash transfer programs on children and parents’ labor status. The usual econometric models show that CCTs reduce the probability of work for children but not their time spent on labor market. Nevertheless, parent’s labor participation is not affected but their working hours change.