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Cash Transfers and Productive Inclusion: Evidence from Bolsa Familia

Author

Listed:
  • Michael C. Best
  • Felipe Lobel
  • Valdemar Pinho Neto

Abstract

We study how cash transfers affect work and health. Exploiting an increase in the generosity of the world's largest cash-transfer program for the extremely poor, we show that the reform raised employment by 5 percent while sharply improving health: hospitalization fell 8 percent and mortality 14 percent, saving roughly 1,000 lives. These findings challenge the view that transfers reduce work. Instead, transfers can relax binding subsistence and health constraints, raise productivity, and expand labor supply. We formalize this mechanism in a model of productive inclusion and use it to evaluate welfare, yielding lessons for antipoverty policy design in low-income settings.

Suggested Citation

  • Michael C. Best & Felipe Lobel & Valdemar Pinho Neto, 2026. "Cash Transfers and Productive Inclusion: Evidence from Bolsa Familia," NBER Working Papers 35006, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:35006
    Note: DEV PE
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    More about this item

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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