Conditional cash transfers, labour markets, and poverty reduction: a pilot study of Brazil's Bolsa Família

As one of the most recent trends in poverty reduction policy, conditional cash transfers (CCTs) provide cash to poor households upon fulfillment of certain conditions, often education or health-related. By increasing CCT beneficiaries’ level of human capital, CCTs aim to increase their skills and resources to lift them out of poverty. Yet, the success of translating increased human capital into long-term poverty reduction is contingent upon changing labour market trajectories. The purpose of this study is to understand CCTs' prospects for long-term poverty reduction, taking Brazil and its Bolsa Família program as a case study, through the opportunities for beneficiaries to improve their labour market outcomes. The results suggest that there are substantial obstacles to beneficiaries’ ability to successfully translate their increased human capital, acquired through the Bolsa Família program, into better labour market trajectories, and therefore long-term capacity for improved income generation and poverty reduction.