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

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 visiting enrolling children in school. However, these programs may also have impact on time use decisions within beneficiaries, particularly with respect to time spent working. In this paper, we aim to measure the impact of Brazilian conditional cash transfer programs on children and parents’ labor status using the econometric framework of policy evaluation. The usual probit and Heckman econometric models show that CCT reduces the probability of work for children but not their time spent on labor market, and that the program is more efficient for girls than for boys. On the other hand, parent’s labor participation is not affected but their working hours change due to the program. An alternative approach, the propensity score matching, will be performed in order to avoid the biases that might arise from some remaining heterogeneity problems.