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Journal Article
The Macroeconomic Impact of Cash Transfers in Brazil
Cash transfers are important fiscal policy tools for both advanced and developing countries. A study of one of the world’s largest cash transfer programs—Brazil’s Bolsa Familia—highlights the potentially large, positive, and persistent effects on the regional economy. Estimates using 2004-2019 data show that Brazilian states receiving 1% of GDP in extra transfers grew at least 2 percentage points faster in the first year. The transfers generate substantial increases in regional formal and informal employment. These effects are larger than those documented in advanced countries like ...
Working Paper
The Macroeconomic Effects of Cash Transfers: Evidence from Brazil
This paper provides new evidence on the macroeconomic impact of cash transfers in developing countries. Using a Bartik-style identification strategy, the paper documents that Brazil’s Bolsa Familia transfer program leads to a large and persistent increase in relative state-level GDP, formal employment, and informal employment. A state receiving 1% of GDP in extra transfers grows 2.2% faster in the first year, with R$100,000 of extra transfers generating five formal-equivalent jobs, half of which are informal. Consistent with a demand-side mechanism, the effects are concentrated in ...