Intergenerational poverty and conditional cash transfers in Brazil

Brazil’s Bolsa Família (Family Allowance) social welfare programme has clear intergenerational aspects, as João Cláudio Rocha Baeta Leal explains. A 24-year-old Brazilian public administrator currently doing an MSc on the Political Economy of Late Development at the London School of Economics, João Leal has carried out research in local development, poverty, democratic participation, government cooperation and microfinance in Brazil, Argentina and Bolivia.

Underdevelopment is never improvised: it is the work of many centuries.” (Nelson Rodrigues, Brazilian playwright)

In this brief article, I am going to address how conditional cash transfers (CCT) – anti-poverty policies that provide pensions, benefits or cash-transfers to low-income households based on pre-established conditionalities – are mitigating intergenerational poverty and its effects in Latin America.

CCTs have focused on children as the main beneficiaries of the policies, and recent studies have shown that these policies have had success in reducing undernourishment and child labour and improving children’s education and health indexes, with the result that CCTs are being implemented by a growing number of countries.

The main definitions in this text are Kate Bird’s concept of intergenerational transmission of poverty as “the private and public transfer of deficits in assets and resources from one generation to another” and Caterina Ruggeri Laderchi’s dimensions of poverty. In this article, I am going to argue that CCTs have a positive impact on both, while focusing on the example of Brazil’s Programa Bolsa Família (PBF), the largest CCT in South America.


One of the dimensions of poverty is the monetary approach, which defines poverty as “a shortfall of consumption”. In this dimension, money is regarded as a proxy for well-being, with its level of utility based either in nutritional value or the cost of basic needs.

Through this lens, I believe that Bolsa Família outcomes have an impact both on family consumption – as well as food security and “bandwidth” (the psychological resilience to deal with it) – and on preventing poverty traps.

Macroeconomically, every Real invested in Bolsa Família has had a multiplier effect of 1.78 in overall GDP and resulted in a 2.4-fold increase in household consumption. This increase in consumption was fundamental in diminishing child malnourishment in Brazil, removing the country from the UN’s Hunger Map in 2014 for the first time in history, and reducing food insecurity.

Both have special effects in tackling intergenerational poverty, as improved nutrition during pregnancy and the early stages of brain development increases cognitive bandwidth in the future. Bolsa Família’s effects on food insecurity also helped to reduce the incidence of low-weight at birth and to lower mortality rates.

Regarding poverty traps, studies analysing the structure of poverty in rural Bangladesh indicate that people living under the extreme poverty line are more vulnerable to external income shocks, preventing proper labour allocation. The provision of a certain level of income, would prevent the poorest from falling into this trap and help them reach a new income equilibrium. Although there is still no work relating PBF and the poverty trap, other CCTs had an important role in diminishing household income vulnerability.


A second angle on the multidimensionality of poverty is based on capabilities. This approach focuses on non-monetary dimensions of well-being, such as health, nutrition and education, and is related to Amartya Sen’s thoughts on John Rawls’ theory of justice.

Historically, a significant proportion of Brazil’s children’s were not enrolled in primary school because of child labour and the lack of universalisation in education, especially in rural areas. In the hope of reversing these historical trends, Bolsa Família required enrolment for all kids from 8 to 15 and an 85% attendance as the main conditionalities of the programme.

Indeed, PBF seems to be effective in increasing school attendance and diminishing non-domestic child-labour (by some 8%). The programme has managed to reduce school non-attendance by 36%, produced an even more significant increase when assessing marginalised educational groups in Brazil (black, male and rural populations) and doubled the possibility of a lower-quintile student finishing high school.

These results may also be affected by increased food consumption, which augments students’ bandwidth. They are specifically significant in reducing intergenerational poverty in view of the effect that parents’ education have on future children. Additionally, some Brazilian universities have implemented socioeconomic quotas, facilitating the access of some of the recipients of Bolsa Família to tertiary education.

Social exclusion

Another dimension of poverty is based on social exclusion, marked by a process of marginalisation from full participation in society.

Conditional cash transfers have proven to have a positive impact both on an individual level, improving recipients’ self-confidence, and in community-level interactions, as the community reabsorbs previously marginalised individuals into communal relations.

Bolsa Família also has an impact on social exclusion through discouraging migration into the overpopulated metropolitan areas of Brazil. Historically, the inhabitants of the semi-arid region known as the sertão would emigrate to Brazil’s major centres during periodic droughts. Local public administrations proved unable to deal with these migratory fluxes, and newly-arrived sertanejos would form the basis for Brazilian favelas. However, Bolsa Família was able to prevent such migratory patterns by increasing workforce demand in regional centres in Brazil’s sertão and promoting capital flows through consumption in small cities affected by drought.

Overall, multiple studies have shown that Bolsa Família has a positive impact on current poverty and that these outcomes might reverberate in decreasing intergenerational poverty. Nevertheless, the continuity of a public policy depends on its constant renewal, affirmation and improvement, all of which face difficulties under the current government.

Although Jair Bolsonaro’s administration made the assessment that discontinuing the programme would have a great political cost, recent budgetary cutbacks and general belt-tightening have seen a decline in the programme’s results and an increase in food insecurity. Brazil now faces the risk of being one of the few countries in history to be reinstated to UN’s map of hunger.


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