The impact on consumption of more cash in conditional cash transfer programs

Abstract

This paper evaluates the impact of an increase in the value of the cash transfer paid to families by the Brazilian Bolsa Família program. The existence of a similar program in the state of Ceará, Bolsa Cidadão, that increases the value received by a sub-group of families, provides a unique dataset, enabling us to evaluate the effect of a higher value of transfer on the spending of comparable households. There is a significant increase in consumption, but it is smaller than the increment in the income, suggesting that the consumption of the households is not properly declared.