Search

Conditional cash transfer (CCT) programs have become the most important social policy in Latin America, and their influence has spread to countries around the world. A number of studies provide strong evidence of the positive impacts of these programs on the main targeted outcomes, education and health, and have proved successful in other outcomes such as nutrition, household income, and child labor. As we expect CCT programs to remain a permanent aspect of social policy for the foreseeable future, demand for evidence of the indirect effects of CCT programs has grown beyond the initial emphasis of these programs. My research pays particular attention to these relevant but unintended outcomes, which have been discussed less extensively in the literature. Familias en Accion (FA), a CCT program in Colombia, started operating in 2002 and has benefited approximately 1,500,000 households since its beginning. The results of the program’s evaluation survey, representative of poor rural households in Colombia, are a very good source or investigating not only the unintended effects of the program but also the microeconomic behavior of poor households and social policy issues in the country. Using a panel dataset from FA, I address three empirical policy questions: (i) to what extent is consumption of beneficiary households better insured against income shocks? (ii) has the program displaced child labor as a risk-coping instrument?, and (iii) are there any incentive effects of the cash transfers and the associated conditionalities on the labor supply of adults in recipient households? Each of my research questions is addressed separately; however, the results, taken together, can be informative in understanding the safety net value of the program and their potentialities to reduce poverty in the long term. I find that the program serves as an instrument for consumption smoothing. In particular, FA is effective in protecting food consumption, but not nonfood consumption, and it reduces consumption fluctuations in response to idiosyncratic shocks but not to covariate shocks. Results also reveal that FA works as insurance for the schooling of the poor but is not able to completely displace child labor. Finally, the results also show that beneficiary mothers are devoting more time to household chores and that girls and female adult labor are complementary. Male labor supply has increased while boys have increased leisure time as a response to the program.