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The long-term effects of conditional cash transfers on child labor and school enrollment

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  • Ferreira, Pedro Cavalcanti
  • Peruffo, Marcel Cortes

Abstract

This paper investigates the long-term e ects of conditional cash transfers on school attainment and child labor. To this end, we construct a dynamic heterogeneous agent model, calibrate it with Brazilian data, and introduce a policy similar to the Brazilian Bolsa Fam lia. Our results suggest that this type of policy has a very strong impact on educational outcomes, sharply increasing primary school completion. The conditional transfer is also able to reduce the share of working children from 22% to 17%. We then compute the transition to the new steady state and show that the program actually increases child labor over the short run, because the transfer is not enough to completely cover the schooling costs, so children have to work to be able to comply with the program's schooling eligibility requirement. We also evaluate the impacts on poverty, inequality, and welfare.

Suggested Citation

  • Ferreira, Pedro Cavalcanti & Peruffo, Marcel Cortes, 2015. "The long-term effects of conditional cash transfers on child labor and school enrollment," FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) 769, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil).
    • Handle: RePEc:fgv:epgewp:769
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    2. Ervin Prifti & Silvio Daidone & Greta Campora & Noemi Pace, 2021. "Government Transfers and Time Allocation Decisions: The Case of Child Labour in Ethiopia," Journal of International Development, John Wiley & Sons, Ltd., vol. 33(1), pages 16-40, January.
    3. Luiz Brotherhood & Bernard Herskovic & Joao Ramos, 2022. "Income-based affirmative action in college admissions," UB School of Economics Working Papers 2022/425, University of Barcelona School of Economics.
    4. Jaime A. Meza‐Cordero, 2023. "Conditional cash transfers tools to combat child labor: Evidence from a randomized controlled trial in Costa Rica," Review of Development Economics, Wiley Blackwell, vol. 27(1), pages 220-246, February.
    5. Mookherjee, Dilip & Napel, Stefan, 2021. "Welfare rationales for conditionality of cash transfers," Journal of Development Economics, Elsevier, vol. 151(C).
    6. Luiz Brotherhood & Bernard Herskovic & João Ramos, 2023. "Income-Based Affirmative Action in College Admissions," The Economic Journal, Royal Economic Society, vol. 133(653), pages 1810-1845.
    7. Subarna Banerjee & Gitanjali Sen, 2024. "Persistent effects of a conditional cash transfer: a case of empowering women through Kanyashree in India," Journal of Population Economics, Springer;European Society for Population Economics, vol. 37(4), pages 1-38, December.
    8. Shreya Biswas & Upasak Das, 2021. "Whats the worth of a promise? Evaluating the indirect effects of a program to reduce early marriage in India," Papers 2104.12215, arXiv.org.
    9. Diego E. Vacaflores & James P. LeSage, 2020. "Spillover effects in adoption of cash transfer programs by Latin American countries," Journal of Geographical Systems, Springer, vol. 22(2), pages 177-199, April.
    10. Li, Bo & Lu, Shilin, 2023. "Labor education, cash transfers and student development: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 87(C).
    11. Cepaluni, Gabriel & Chewning, Taylor Kinsley & Driscoll, Amanda & Faganello, Marco Antonio, 2022. "Conditional cash transfers and child labor," World Development, Elsevier, vol. 152(C).
    12. Zhao, Xi & Wang, Julia Shu-Huah, 2021. "The effects of multiple welfare program participatifon on educational expenditures and time use: Evidence from the social safety net in China," Children and Youth Services Review, Elsevier, vol. 131(C).
    13. Ferreira, Pedro Cavalcanti & Peruffo, Marcel Cortes & Cordeiro Valério, André, 2021. "Universal Basic Income in Developing Countries: Pitfalls and Alternatives," FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) 821, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil).

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