Anchors in the Storm: Can Emergency Cash Transfers Protect Human Capital During Economic Crises?

Can emergency unconditional cash transfers (UCTs) protect educational investments and human capital accumulation during economic crises? While UCTs mitigate immediate economic hardship, evidence on their capacity to safeguard educational outcomes during emergencies remains limited. This study investigates Brazil’s Auxílio Emergencial program, one of the developing world’s largest emergency cash transfer programs, and its impact on educational attendance during the COVID-19 pandemic. Using household survey microdata and a regression discontinuity design that exploits exogenous variation in program eligibility, I estimate causal effects on educational attendance among demographic groups within vulnerable single-mother households. Eligibility increased attendance by 16.0 percentage points for young men aged 18–24, with effects driven primarily by those who had dropped out and re-engaged with secondary virtual education. The effects are concentrated among men and are not statistically significant for women. The mechanism operates by reducing economic pressure on households, enabling continued educational participation among younger members while preventing primary earners from engaging in low-quality or informal employment.