How and When: Cash and Care Effect of Conditional Cash Transfers on Birth Outcomes

Abstract
While conditional cash transfers are a powerful tool to alleviate poverty and improve many short run socioeconomic outcomes of targeted families, very little is known about how and when these programs improve in utero conditions of babies. Moreover, there is scarce evidence on whether additional transfers to already eligible families can improve outcomes at birth. This paper fills these two gaps by exploring quasi-random income variation on one of the world’s largest CCT program – the Bolsa Família in Brazil – taking advantage of sharp eligibility criteria that are due to birth dates of family members. Overall, the results point to a null effect of additional income on
birth outcomes, even when transfer amounts are sizable. We also find no behavioral responses on conditionality compliance and prenatal care of pregnant mothers. However, additional cash transfers to women meeting an adequate prenatal care reduces preterm birth by 10 percent, with effects concentrated in transfers that occur as early as in the first trimester of pregnancy. Our findings speak to the role complementarity between prenatal care and family income in producing health at birth: even small amounts of cash transfers can be effective in improving birth outcomes when
coupled with adequate prenatal care.