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A HETEROGENEITY ANALYSIS OF THE BOLSA FAMÍLIA PROGRAMME EFFECT ON MEN AND WOMEN’S WORK SUPPLY

A HETEROGENEITY ANALYSIS OF THE BOLSA FAMÍLIA PROGRAMME EFFECT ON MEN AND WOMEN’S WORK SUPPLY. Clarissa Gondim Teixeira. Introduction. Bolsa Família Program – the Brazilian CCT Origin : PBF starded in 2003 as a result of the fusion of existing cash transfer programs

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A HETEROGENEITY ANALYSIS OF THE BOLSA FAMÍLIA PROGRAMME EFFECT ON MEN AND WOMEN’S WORK SUPPLY

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  1. A HETEROGENEITY ANALYSISOF THE BOLSA FAMÍLIAPROGRAMME EFFECT ON MENAND WOMEN’S WORK SUPPLY Clarissa Gondim Teixeira

  2. Introduction • Bolsa FamíliaProgram – theBrazilian CCT • Origin: PBF starded in 2003 as a result of thefusion of existing cash transfer programs • Motivation: • AchievetheMDGs – short-runpovertyreduction (cash transfer) • Universal policiesfailuretoprovideaccesstobasicservices – increasedemandforeducation and health (conditionality) • Breakingintergenerationalpoverty cicle – investment in humam capital (conditionality)

  3. Introduction PBF positive effects: • Increase in food consumption and educational expenditures (CEDEPLAR, 2005) (IFPRI, 2010). • Reduction in inequality and poverty rates (Chein, Andrade and Ribas, 2006) • Increase in school attendance but no consensus on child labor effects (Cardoso y Souza, 2004), (Cacciamali, Tatei y Batista, 2008), (Pedrozo, 2007), (IFPRI, 2010).

  4. Introduction Frequent criticism concerning negative effects on labor supply: • No change in income – question the effectiveness of the program • Generates dependency – concern with exit doors

  5. Introduction • Objectives of the paper are: • Identify the existence of PBF´s impact on men and women´s participation rate and journey; • Through the disaggregated analysis by sex, type of occupation and ‘dose-effect’: • Explain the relation of receiving cash transfers and labor supply; • Identify and characterise the individuals whose labour supply are the most elastic.

  6. Literature review • Time allocation theory (Becker, 1965) • Income and subsititution effects (Parker and Skoufias, 2000) • Multiplier effects (Martínez, 2004) • Informal work and production function (Cardoso, 1999) • Additional worker (Stephens, 2001) • ‘Collective approach’ of intrahousehold resource allocation (Chiappori, 1992)

  7. Literature review • Individual level • Increase in participation rate greater for women- Cedeplar (2005) • Increase in participation rate - IFPRI (2010) • Decrease in participation rate and labor hours for mothers -Tavares (2008) • No effect participation rate, decrease in labor hours, increase for rural women - Ferro Nicollela (2007) • Municipal level • No effect - Foguel Barros (2008) • Participation rate: increase rural, decrease urban – Ribas, Soares, Soares (2010)

  8. Bolsa Família Programme (PBF) • Elegibility criteria: extremely poor families and poor families with children. • Targeting • Self-declared income verified by cross checking with formal work data • Analysis of Single Registry information • Inclusion and exclusion errors

  9. Bolsa Família Programme(PBF) • Cash Transfers: • Variable transfer of US$7.00 per childornursingmothermaximun of 3 per familiy (avoid incentive tochildbearing); • Fixed transfer of US$23.00 onlyforextremelypoorfamilieswithorwithoutchildren.

  10. Bolsa Família Programme (PBF) • Conditionalities: • 85% of schoolattendance; • Vaccinationforchildrenunder 6 yearsold; • Pre and pos natal careforwomen.

  11. Bolsa Família Programme (PBF) • Exitdoors: • Age of child (doesnotpunishprogression) • Family per capitaincomeaboveeligibility – single registriyupdatedevery 2 years (vulnerability )

  12. Labor market of the poor Source: PNAD 2006. Own calculation.

  13. Labor market of the poor Men Women Source: PNAD 2006. Own calculation.

  14. Labor market of the poor Men Women • AIBF 82% Urban - PNAD 67% Urban Source: AIBF 2005 and PNAD 2006. Own calculation.

  15. Evaluation estrategy • Cross section using annual household data – PNAD 2006 • Cash transfer supplement • Quasi-experimental design • Propensity Score • Re-weighted multivariable regression • Cluster in the household level

  16. Empirical Investigation Source: PNAD 2006. Own calculation Source: PNAD 2006. Own calculation

  17. Results • The average effect on the probability of working is not significant for men or women.

  18. Results • PBF does not cause a large work ‘discouragement’ • Women are more sensitive to an income shock

  19. Results Source: PNAD 2006. Own calculation.

  20. Results Source: PNAD 2006. Own calculation.

  21. Results Source: PNAD 2006. Own calculation.

  22. Results Source: PNAD 2006. Own calculation.

  23. Results • Formal work is found to be the least elastic due to workers’ rights and income stability; • Urban self-employed women are the most sensitive to the PBF transfer; • Informal paid rural jobs are the most sensitive for men. • Unpaid workers reduce their labor hours in contrast with those earning one or two minimal wage

  24. Results

  25. Conclusion • One cannot affirm that PBF is responsible for generating dependence on account of income transfers • The results also confirm that the elasticity of labor supply varies according to sex and type of work. • Higher effects were found for greater income shock intensities

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