Cash Transfer Policies in Developing Countries: Universal

Pedro Ferreira, Marcel Peruffo and André Valério

No 846, FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) from EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil)

Abstract: This paper employs a heterogeneous-agent life-cycle model with inter-generational linkages calibrated to Brazilian data to compare Universal Basic Income (UBI) and Conditional Cash Transfer (CCT) policies. Both reduce short-term poverty, but the CCT, which is meanstested and requires school attendance, fosters sustained growth through human capital accumulation, further reducing poverty and inequality for future generations. In contrast, the UBI leads to long-term declines in savings and education, reducing income and welfare while increasing poverty. Despite this, a UBI would be favored by the current

Date: 2025-03-28
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Persistent link: https://EconPapers.repec.org/RePEc:fgv:epgewp:846

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