The Impact of Cash Transfers on Child Labor and School Attendance in Brazil

The paper estimates the impact on school attendance and child labor of conditional cash payments to poor families in Brazil. It describes Brazil's transfer programs and presents statistics on school attendance and child labor. In the second half of the 1990s, many municipalities had adopted the "Bolsa Escola" (a cash transfer conditional on school attendance) and/or the federal minimum income program (in place during 1999 and 2000 and replaced by the "Bolsa Escola Federal" in 2001). Although conditional cash transfer programs in Brazil have been in place since 1996, studies on their ex-post impact are very few. Micro household level data from the 2000 Census allows the use of propensity score methods to estimate the impact of income transfers on child labor and school attendance. The paper finds that income transfer programs had no significant effect on child labor but a positive and significant impact on school attendance. These preliminary results suggest that these programs have not been effective in fighting child labor in Brazil. They increase the chance of a poor child going to school but do not reduce her labor activity perhaps because she prefers to combine school and labor, considering that the transfers are too small to provide an incentive to forgo the labor income.