and Bergmark (2011), for example, examined the impact of individual characteristics on the probability of exit in Spain and Sweden, finding that gender and prior work experience influenced exit probabilities. A recent policy note, on which the current research builds, looks at the duration of stay of families in BF more descriptively and identifies the level of education of adult members, labor supply constraints and prior work experience as significant predictors (Morgandi _et al._ , 2023).

Second, this paper also contributes indirectly to the vast literature on cash transfers and labor supply. Economic theory suggests that cash transfer may potentially reduce labor supply, especially in the formal sector, if the transfer generates a high marginal tax rate on labor earnings due to benefit withdrawal rules. In the case of BF, Fietz _et al._ (2021) show that from a theoretical _de jure_ perspective, the program has an incentive-compatible design. The authors find that BF has one of the lowest personal and marginal tax rates on earned labor incomes when compared with other programs in the OECD.<sup>9</sup> Moreover, the BF program contains safeguards that allow beneficiaries to remain for additional time in the program when their income rises above the threshold at entry. Yet, it is unclear if families are entirely aware of these rules and act based on such incentives (Fietz _et al._ , 2021). For instance, Levy and Cruces (2021) argue that beneficiaries might prefer informal employment out of concern of not being able to re-enter the program if they leave.

The empirical evidence on work incentives and cash transfer programs generally indicates limited or no disincentive effects on labor supply.<sup>10</sup> For Brazil specifically, the evidence suggests that BF did not discourage (formal) labor market participation, although some studies find increases in informal hours worked.<sup>11</sup> Closely related to this is the research looking at labor children reaching adulthood.

> 9Becker (1965) shows that individuals should increase their demand for leisure as non-labor income rises. Following this reasoning cash transfer recipients would be expected to reduce their labor supply as soon as they receive the monetary transfer. Additionally, beneficiaries might be influenced through various other channels – such as the health productivity effect, the self-employed liquidity effect, the insurance effect, and the investment in labor search effect (Baird _et al._ , 2018). Those effects, which may increase or decrease the labor supply of cash transfer beneficiaries, challenge the simplistic theory of the lazy welfare recipient.

> 10In a systematic review, Kabeer and Waddington (2015) finds negative effects on labor force participation in only one program (in Pakistan), though some studies document reduced formality (e.g., Garganta and Gasparini (2015)).

> 11Using the Brazilian household survey and exploiting a change in the program’s eligibility line, Barbosa and Corseuil (2014) do not find evidence of BF distorting occupational choices toward informal jobs. Fruttero _et al._ (2020) use Brazilian data and an unannounced change in the program’s eligibility rules. Restricting their sample to families that had just updated their information before the policy change was announced – hence, those families were unable to update information untruthfully due to the policy change – the authors find that BF beneficiaries are “4.7 percentage points more likely to be found at least once in a formal job in 2010 or 2011 and 3.3 percentage points more likely to be found in a formal job throughout these two years.” The results are especially strong for younger cohorts (between 25 and 35 years old and 35 and 45 years old). De Brauw _et al._ (2015) find no overall impact on labor force participation of BF beneficiaries using longitudinal household-level panel data collected in 2005 and 2009. The authors, however, do find an increase in the intensive margin of informality (through

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