Spillovers from conditional cash transfer programs: Bolsa Família and crime in urban Brazil

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This paper investigates the impact of conditional cash transfer (CCT) programs on crime. Making use of a unique dataset combining detailed school characteristics with geo-referenced crime information from the city of São Paulo, Brazil, we estimate the contemporaneous effect of the Bolsa Família program on crime. We address the endogeneity of CCT coverage by exploiting the 2008 expansion of the program to adolescents aged 16 and 17. We construct an instrument that combines the timing of expansion with the initial demographic composition of schools to identify plausibly exogenous variation in the number of children covered by Bolsa Família. We find a robust and significant negative impact of Bolsa Família on crime. Incapacitation from time spent in school does not seem to be an important driving force behind the results.