A HETEROGENEITY ANALYSISOF THE BOLSA FAMÍLIAPROGRAMME EFFECT ON MENAND 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

•Motivation: • Achieve the MDGs – short-run poverty reduction

(cash transfer)• Universal policies failure to provide access to basic

services – increase demand for education and health (conditionality)

• Breaking intergenerational poverty cicle – investment in humam capital (conditionality)

IntroductionPBF 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).

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

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.

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)

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)

•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

Bolsa Família Programme (PBF) Bolsa Família Programme (PBF)

Bolsa Família Programme(PBF) Bolsa Família Programme(PBF) Cash Transfers:•Variable transfer of US$7.00 per child or nursing mother maximun of 3 per familiy (avoid incentive to childbearing); •Fixed transfer of US$23.00 only for extremely poor families with or without children.

Monthly per capita income Transfer values (2006)

Below extreme poverty line(US$ 23.00 )

US$ 44.00

US$ 37.00

US$ 30.00

US$ 23.00

Between extreme poverty line(US$ 23.00) and poverty line (US$ 46.00)

US$ 21.00

US$ 14.00

US$ 7.00

Bolsa Família Programme (Bolsa Família Programme (PBFPBF) )

• Conditionalities:- 85% of school attendance;

- Vaccination for children under 6 years old;

- Pre and pos natal care for women.

Bolsa Família Programme (Bolsa Família Programme (PBFPBF) )

• Exit doors:- Age of child (does not punish progression)

- Family per capita income above eligibility – single registriy updated every 2 years (vulnerability )

Labor market of the poor

Source: PNAD 2006. Own calculation.

Labor market of the poor

Source: PNAD 2006. Own calculation.

Men Women

Labor market of the poor• AIBF 82% Urban - PNAD 67% Urban

Source: AIBF 2005 and PNAD 2006. Own calculation.

Men Women

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

Empirical Investigation

Source: PNAD 2006. Own calculation Source: PNAD 2006. Own calculation

Results•The average effect on the probability of

working is not significant for men or women.

Results•PBF does not cause a large work

‘discouragement’•Women are more sensitive to an income

shock

ResultsWork hours Men Women Men Women

Rural -1.08*** -0.34 Agricultural -0.81** -0.67

0.39 0.52 0.37 0.57

Urban -0.35 -1.31** Non-agricultural -0.53* -0.95*

0.28 0.57 0.29 0.51

Source: PNAD 2006. Own calculation.

Results

Work hours Men Women Men Women Formal worker 0.16 -0.70

0.29 0.84 Rural -0.62 -1.00 Agricultural -0.12 -4.41

0.71 2.24 0.70 3.10 Urban 0.30 -0.58 Non-agricultural 0.15 0.00 0.32 0.82 0.31 0.78 Informal worker -0.88*** -0.81*

0.29 0.42 Rural -1.14*** -0.30 Agricultural -0.92** -0.56

0.42 0.56 0.40 0.60 Urban -0.63 -1.38** Non-agricultural -0.83** -1.06* 0.39 0.62 0.41 0.58

Source: PNAD 2006. Own calculation.

ResultsWork hours Men Women Men Women

Self-employed -0.35 -1.16*

0.41 0.61

Rural -0.26 0.19 Agricultural -0.31 -0.85

0.58 0.64 0.53 0.77

Urban -0.44 -3.23*** Non-agricultural -0.40 -1.60

0.56 1.13 0.61 1.02

Paid worker -0.84*** -0.82*

0.28 0.48

Rural -1.77*** -0.93 Agricultural -1.22** -0.66

0.52 0.78 0.49 0.86

Urban -0.24 -0.73 Non-agricultural -0.54* -0.89

0.32 0.61 0.32 0.57

Source: PNAD 2006. Own calculation.

Results

Source: PNAD 2006. Own calculation.

Cost of labor hour (Minimal wage) Men Women

0 -3.87*** -0.76

0.90 0.51

1 -0.93 -0.80

1.21 1.60

2 0.30 0.29

0.59 0.94

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

ResultsTransfer Value (R$) Men Women

15 0.04 -0.46 0.41 0.66

30 -0.32 -0.53 0.45 0.81

45 -0.22 -0.95 0.53 0.82

50 -1.49** -1.15 0.58 0.75

65 -0.20 -0.10 0.38 0.57

80 -0.77** -1.23**0.36 0.58

95 -1.07*** -1.13** 0.35 0.57

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