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IFS-STICERD Public Economics Seminar

Cash Transfers and the Local Economy: Evidence from Brazil

Joana Naritomi (Institute for Fiscal Studies and LSE)

Wednesday 08 March 2023 12:30 - 13:45

Many of our seminars and public events this year will continue as in person or as hybrid (online and in person) events. Please check our website listings and Twitter feed @STICERD_LSE for updates.

Unless otherwise specified, in-person seminars are open to the public.

Those unable to join the seminars in-person are welcome to participate via zoom if the event is hybrid.

About this event

Cash transfer programs became ubiquitous in developing countries and have been credited for sizable reductions in poverty. However, their potential disincentive effects on labor supply have spurred a heated policy debate on the economy-wide effects. This paper studies the impact of the main Brazilian cash transfer program, Bolsa Familia, on the local economy. We find that an expansion of the program positively affected the local economy - employment, banking activity, GDP - using variation in the size of the reform across municipalities. The evidence is consistent with multiplier effects of cash transfers, which dominate potential negative effects on labor supply among beneficiaries. These positive economy-wide effects can double the marginal value of public funds of Bolsa Familia, going from below the value of a non-distortionary transfer to a value well above its resource cost.

This seminar series is jointly organized by the IFS and STICERD.

IFS-STICERD Public Economics seminars are held on Wednesdays in term time at 12.30-13.45 IN PERSON at the IFS.

Seminar organisers: Stuart Adam (IFS), Monica Costa Dias (IFS), Xavier Jaravel (LSE), Camille Landais (LSE), Attila Lindner (UCL), Joana Naritomi (LSE), and Johannes Spinnewijn (LSE).

For further information please contact Peter Levell: .

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