Social Programs and Formal Employment: Evidence from the Brazilian Bolsa Família Program

By Anna Fruttero, Alexandre Ribeiro Leichsenring, Luis Henrique Paiva

June 19, 2020

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Anna Fruttero, Alexandre Ribeiro Leichsenring, and Luis Henrique Paiva. Social Programs and Formal Employment: Evidence from the Brazilian Bolsa Família Program, (USA: International Monetary Fund, 2020) accessed December 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Employment is key to combating poverty. Thus, detractors of social assistance programs argue that they create disincentives to work. While there is substantial evidence showing limited effects of these programs on overall labor supply, the jury is still out with respect to their impact on formal employment. This paper exploits an unannounced change in the eligibility rule of the Bolsa Familia program in Brazil, one of the oldest and largest conditional cash transfers in the world, to identify the causal impact of the program on formal employment, combining three large administrative datasets. This paper finds that the program has a positive effect on entry in formal labor market, especially for younger cohorts.

Subject: Employment, Labor, Labor markets, Labor supply, National accounts, Personal income

Keywords: Anti Poverty, Bolsa Familia program, Brazil, Cash transfer programs, Eligibility cutoff, Employment, Employment relation, Formalization of Bolsa Familia beneficiary, Government program, Higher-labor-supply individual, Income effect, Informality, Job act, Job searching, Labor market, Labor market formalization, Labor market job, Labor market outcome, Labor market participation, Labor market vis-a-vis, Labor markets, Labor supply, Latin America, Personal income, Poverty, Result, Social programs, Treatment effect, Welfare, Well Being, WP

Publication Details

Pages:

21
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2020/099
Stock No:

WPIEA2020099
ISBN:

9781513547701
ISSN:

1018-5941

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