An evaluation of the Bolsa Família Program: targeting and impact on income distribution and poverty

Abstract

This article uses data from the 2004 PNAD to evaluate Bolsa Família’s targeting and its impact on poverty and income inequality for Brazilian states. We also calculate how these results change with respect to two simulation exercises. The first simulates targeting and impacts under the hypothesis that Brazilian government adopts the proxy means-test targeting mechanism, holding current policies’ cost. The second simulates an expansion of the program, keeping the current selection mechanism. Results suggest that the success in targeting depends on the available budget of each state, as well as the local targeting efficiency, which may be related to local poverty depth. Targeting would improve if the government adopted the alternative selection mechanism of the first exercise rather than expanding the program as considered in the second simulation. The nature of impacts in each state and simulation depends on beneficiaries’ profile.