Public Transfer and Interhousehold Transfers to the Elderly in Brazil

Vitor F Miranda, University of Pennsylvania
Eduardo L.G. Rios-Neto, Centro de Desenvolvimento e Planejamento Regional (CEDEPLAR)
Cassio M. Turra, Centro de Desenvolvimento e Planejamento Regional (CEDEPLAR)

This article examines the flow of interhousehold transfers to the elderly in Brazil. More precisely, we investigate if an exogenous increase in the income of the poor elderly, made by a public transfer program, decreased the interhousehold transfers received by this group. To test this hypothesis we used data from periods before and after two major reductions in the age of eligibility to the program. The impact is then analyzed using a difference-in-difference approach. Using nationally representative data it was found a reduction both in the probability to receive private transfers and in the magnitude of transfers received by the age groups that became eligible. This indicates that Brazilian families may crowd-out private transfers in response to public transfers and points out that the possibility of crowding-out effects should be considered in the design of future income transfer policies in Brazil.