The Impact of a Conditional Cash Transfer Program on Household Income in Colombia

Diana Hincapié

Abstract


This paper estimates the impact of Familias en Acción, the largest Colombian conditional cash transfer program, on household income. It uses a Quantile Regression methodology and Difference-in-Difference estimators to capture the impact of the program on household income at different quantiles of the income distribution. The estimations show that the program has a positive impact on household income, and that this impact is larger for the households at the lower quantiles of the income distribution. Additional analyses examine whether these results stem from changes in labor market participation or increases in non-labor income. There is some indication that for program participants there was a decrease in labor income, while there was an increase in subsidies or non-labor income. Implications of these findings for conditional cash transfer programs are discussed.

Keywords


conditional cash transfer; Familias en Acción; Colombia; Quantile Regression methodology; Difference-in-Difference; household income; labor income

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DOI: https://doi.org/10.4079/pp.v19i0.10423