Intended and unintended effects of unconditional cash transfers: The case of Bolivia’s Renta Dignidad

This document presents a quasi-experimental impact evaluation of Renta Dignidad, a universal non-contributory pension to old-age population in Bolivia, on intended and unintended outcomes including: household’s welfare, investments and savings, and labor market outcomes of direct and indirect beneficiaries. To identify the causal effects of the program we take advantage of an exogenous policy change that reduces the eligibility criteria from 65 to 60 years in December of 2007. Our identifaction strategy relies on both, the simple Difference-in-Difference and the more complex Changes-in-Changes approach to calculate not only average, but also quantile treatment effects. We find that non-contributory household transfers have complex intended and unintended effects on different individual and household outcomes for different types of individuals and households. In the case of women, we find that non-contributory pensions have, on average, increased their households’ non-labor income, which has decreased their labor supply and labor earnings, which in turn has decreased households’ labor income. In the case of men, the transfer has increased their households’ non-labor income and increased their households’ per-capita income, but the latter is not significant.