Research

Working Papers

"Timing Matters: Exploring the Relationship Between Cash Transfer Disbursement and the Financial Health of Impoverished Households" with Marco Bonomo, Filipe Correia and Lucas Teixeira (Job Market Paper, Draft Soon)

Abstract: Exploring a random variation in the cash transfer payment schedule, we studied the impact of within-month transfer withdrawal day variation on credit intake and performance of low-income households. Our findings reveal that households struggle to manage their finances when facing a later withdrawal day, even with predictable schedules. In particular, they often resort to consumption credit to meet their needs and present higher default rates. This insight should guide policymakers in adjusting payment schedules to avoid creating financial strain for beneficiaries and undesirable inequalities between households.

Presentations: 2023 Elsevier Finance Conference, Rio de Janeiro

"Debt Accumulation of CCT Beneficiary Households: Evidence from Brazil using rich administrative dataset" with Marco Bonomo and Lucas Teixeira

Abstract: Using rich Brazilian administrative data, we investigate the effect of conditional cash transfers (CCT) on poor households' debt accumulation by exploring beneficiary status discontinuities that enables us to estimate the effect of unexpectedly receiving the cash transfer and (potentially) anticipated loss of (part of) the benefit. Using difference-in-differences and regression discontinuity specifications, we find evidence that credit card helps households cope with negative liquidity shocks, indicating that it works as a substitute for cash transfers. Moreover, the credit supply of productive microcredit is sensitive to the benefit and losing the cash transfer in total (but not only partially) can increase ex-beneficiaries' labor supply.

Presentations: 2022 European Winter Meeting of the Econometric Society - Berlin School of Economics at Humboldt University Berlin, 2023 Annual Conference of the Banco Central do Brasil, Brasília, Brasil, 2023 Africa Meeting of the Econometric Society, Nairobi, Kenya,  2023 Asian Meeting of the Econometric Society, NTU Singapore Forthcoming: 2024 American Economic Association Meeting in San Antonio, TX

"The Incentives Landscape within Marginalized Communities: The Case of Entrepreneurship, Credit, and Crimes in Brazilian Favelas" with Victor Monteiro and Daniel Caluz

Abstract:  This paper studies the role of policies against crime in slum regions as the engine for providing opportunities to their inhabitants, stimulating entrepreneurship, reducing criminality, and allowing access to the credit market. Empirically, we use the installation and the extinction of PeaceMaker Unit (Unidade de Policia Pacificadora) policy in the city of Rio de Janeiro as quasi-experiments, running a difference and difference to estimate their effects in crime rates, surge of entrepreneurs and access to credit. After, we conduct an empirical test on how credit expansion provides a positive spiral to reduce crime rates and increase the number of micro-entrepreneurs living in the pacified slums. We find that pacification decreased crime rates, such as robberies, commerce robberies, and thefts, restoring the local rule of law, which stimulated the creation of 0.45 new formal entrepreneurs per 1000 inhabitants and increased credit per capita by almost 1200 Brazilian Reais.  Results suggest a positive feedback effect between opportunities, reduction in crime rates, and credit concession within slums. That is,  more credit seems to increase the number of formal firms within the slums, which increases the level of employment of their inhabitants, who have not less incentives to engage in crime by increasing risk detection but also better returns from legal activities. 

Presentations: 2023 North East Universities Development Consortium (NEUDC) Conference at Harvard University, 45th Meeting of the Brazilian Society of Econometrics

Work in Progress

"Temporary and Permanent Income Shocks: The Marginal Propensity to Consume of Poor Retirees in Brazil" with Marco Bonomo, Lucas Teixeira, and Cristina Roriz

Abstract: This paper explores how poor retirees in Brazil respond to temporary and permanent income shocks using a unique dataset that combines multiple administrative data. While the initial amount retirees receive is always equal to one minimum salary, the first amount is proportional to the number of months it took for the Citizenship Ministry to confirm their eligibility. We explore this variation to estimate the marginal propensity to consume and discuss the implications for social policy by using an event study where the control group is not-yet-treated retirees, under the identification assumption that the time they wait is random because it depends on the local government's efficiency.