The long-run effects of conditional cash transfers

Conditional cash transfer (CCT) programmes aim to break the intergenerational transmission of poverty by fostering human capital accumulation among children in vulnerable households. However, due to data limitations, evidence on their long-run effects remains scarce. This paper contributes to the literature in two main ways. 

First, by proposing a methodological approach to estimate the long-term impacts of CCTs in the absence of longitudinal data. Second, by providing first evidence on the long-run effects of the flagship programme of Latin America’s largest economy, the Brazilian Bolsa Família. We develop a simple empirical strategy that combines a two-stage, two-sample approach with a difference-in-differences design, making it particularly suitable for data-poor settings. 

Applying this framework to Bolsa Família, we find robust evidence of sustained positive effects among former beneficiaries. Programme participation increases educational attainment and labour income in adulthood, indicating that the benefits of the intervention extend well beyond childhood. At the same time, these long-run gains are unevenly distributed across population groups, revealing important heterogeneities in the programme's capacity to generate sustainable upward mobility.