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Heterogeneity in Bolsa Família Outcomes

Armando Barrientos (University of Manchester) Darío Debowicz (University of Swansea) and Ingrid Woolard (University of Cape Town) International Research Initiative on Brazil and Africa (IRIBA) End of Project Workshop, Aspects of the Brazilian Development Model, Columbia University Global Center, Rio de Janeiro 2nd December 2016

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Background

Expansion of social assistance following the 1988 Constitution Initially focus on pensions : Previdencia Social Rural and Beneficio de Prestacao Continuada continuity with Bismarckian approach social protection (covers workers outside social insurance) Municipal activism - 1995 Bolsa Escola leading to 2003 Bolsa Família break with Bismarckian approach: social assistance not insurance; families with children; combine transfers with human capital accumulation Bolsa Família becomes the largest transfer programmme (14m beneficiary households) In contrast to other ccts in the region: income tests; 'soft' conditions; 2-year transfer guarantee; decentralised implementation Federal-Municipal; Social Assistance Centres Impact: Evaluations find positive effects on human development: child schooling and health; labour supply effects: reduced child labour but marginal effects on adult labour supply To date, focus on mean effects, what about the distribution of effects across municipalities?

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Data Annual PNAD data 2003 to 2009 and 2001 for pre-programme baseline; select self-representative municipalities (17,000 - 10m inhabitants); data aggregated at municipal level Approach Examine how outcomes 𝑦!,! respond to 𝑥!,! = 𝐵𝐹!,! ,𝑋𝑂!,! , where 𝑚 indexes municipalities, 𝑡 indexes time (year), 𝐵𝐹 stands for the fraction of households who receive Bolsa Família transfers in a particular municipality m in year t, 𝑋𝑂 stands for pre-programme observables including poverty and other covariates Estimated a short panel quantile regression model:

𝑄! 𝑦!" 𝑥! = 𝛽!𝐵𝐹!" + 𝛿!!𝑏𝑣𝑗𝑎𝑏𝑠!𝐵𝐹!" + 𝛿!!𝐷𝐸𝑉!!! 𝐵𝐹!"!!!! + 𝑐𝑜𝑛𝑡𝑟𝑜𝑙𝑠 + 𝜓!! + 𝑥!!! λ!

! +⋯ 𝑥!"! λ!! (1’)

Outcomes of interest School attendance girls and boys and adult labour for participation

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Figure 1. The distribution of Bolsa Família effects on adult labour force participation rate across quantiles of a panel of municipalities 2003-2009

Source: Authors’ quantile regression panel data and OLS regressions. For quantile regressions, point estimates and bootstrapped confidence intervals at 90% and 95% are included. All specifications include all regressors, including per capita income, adult school level, employment structure, household head characteristics, other individual characteristics, dwelling characteristics, geographical area, as well as unobservable accounting characteristics. The sample size is 1,911 self-representative municipal observations given by 7 observations for each of 273 self-representative municipalities.

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Figure 2. The distribution of Bolsa Familia effects on school attendance rates of girls 6-15 years old across quantiles of a panel of municipalities 2003-2009

Source: Authors’ quantile regression panel data and OLS regressions. For quantile regressions, point estimates and bootstrapped confidence intervals at 90% and 95% are included. All specifications include all regressors, including per capita income, adult school level, employment structure, household head characteristics, other individual characteristics, dwelling characteristics, geographical area, as well as unobservable accounting characteristics. The sample size is 1,911 self-representative municipal observations given by 7 observations for each of 273 self-representative municipalities.

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Figure 3. The distribution of Bolsa Família effects on school attendance rates of boys 6-15 years old across quantiles of a panel of municipalities 2003-2009

Source: Authors’ quantile regression panel data and OLS regressions. For quantile regressions, point estimates and bootstrapped confidence intervals at 90% and 95% are included. All specifications include all regressors, including per capita income, adult school level, employment structure, household head characteristics, other individual characteristics, dwelling characteristics, geographical area, as well as unobservable accounting characteristics. The sample size is 1,911 self-representative municipal observations given by 7 observations for each of 273 self-representative municipalities.

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Main findings Fail to find significant Bolsa Família effects on labour force participation across the panel of municipalities Statistically significant heterogeneity in girls' school attendance - municipalities with low girls' school attendance rates show the largest effects at .05 quantile, a 1% higher BF incidence is associated with a 0.3 pp increase in girls' school attendance Statistically significant heterogeneity in boys' school attendance, but smaller effects than for girls In addition to raising mean school attendance, Bolsa Família helped equalise outcomes across municipalities Supports a case for greater attention to be paid to the distribution of effects, not just their mean; and for employing welfare weights in assessing their worth

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Existential issues: Guaranteed income? Social assistance? Child transfer?

From Barrientos,A.,&TeliasSimunovic,A.(2015).ChildpovertyreductioninBrazil:reversingBismarck?InE.Fernandez,C.Canali,T.Vecchiato,&A.Zeira(Eds.),TheoreticalandEmpiricalInsightsintoChildandFamilyPoverty:Crossnationalperspectives(pp.159–179).Sydney:Springer.

Barrientos,A.(2013a).TheRiseofSocialAssistanceinBrazil.DevelopmentandChange,44(4),887–910.

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Shareofpopula,ongroupinpoverty2004-2009usingpercapitahouseholdincome

2004extremepoverty 2004poverty 2009extremepoverty 2009poverty

DataSource:Osorioetal2011;extremepovertyandmoderatepovertythresholdssetatBolsaFamiliaeligibilitythresholds[RS$50andRS$100respecLvelyin2003]

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DataSource:Azevedoetal[2012]

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Finance issues: Tax-transfers and distribution

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Brazil:Taxincidencebydecileofpercapitahouseholdincome2008/9Indirecttaxes/totaincome directtaxes/totalincome alltaxes/totalincome

Data Source:Silveira,F.G.;J.Ferreira;J.MostafaandJ.A.Ribeiro(2011),Qualoimpactodatributaçãoedosgastospúblicossociais na distribuçãoderendadoBrasil?Observandoosdoisladosdamoeda,inJ.A.Ribeiro;A.J.LuchieziandS.E.A.Mendonça(eds.), ProgressividadedaTributaçãoeDesoneraçãodaFolhadePagamentos,Brasilia:IPEA,25-64.

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From Barrientos, A. (2014). On the distributional implications of social protection reforms in Latin America. In G. A. Cornia (Ed.), Falling Inequality in Latin America: Policy Changes and Lessons. Oxford: Oxford University Press.