program exit to improvements in household income or living conditions. However, little has been researched on the income and labor market dynamics of CCT beneficiaries in developing countries.

Being among the few CCTs in developing countries that frequently reassess eligibility via household income tests, the BF program is ideal for exploring this question.<sup>6</sup> A rich set of administrative data on formal employment at the municipal level allows us to capture the relationship between “rising tides” in the local labor market and program exits, while individual data on job matches allows us to identify one of the likely channels for exits, the increase in formal employment of its beneficiaries.

In addition, the program itself has several optimal features to explore our research question. First, while much of the literature implicitly assumes that duration in CCTs programs is either exogenously determined by time limitation rules, or, absent these, largely indefinite, with families lasting in CCTs until children reach adulthood<sup>7</sup> , the basic benefit of BF allows families and individuals to stay in the program as long as they meet the eligibility criteria of a per capita income below the eligibility threshold. In other words, not all families have to exit when children become adults. Second, the eligibility determination in BF depends on a centralized means test, instead of the more common proxy means test targeting. Families at the time of application self-report their income from all sources: this information then undergoes cross-verification with several other registries. The same verification process is repeated at each re-certification episode. As such, the program is sensitive to income fluctuations at entry and exit (Gazola Hellmann, 2015). These design features make BF an ideal case study on the factors that affect exit from CCTs, a question that, to the authors’ knowledge, has not been studied before for CCTs or for programs in developing countries.

Our paper contributes to different strands of the literature. First, we add to the literature by examining the reasons that explain exits from social assistance. So far, the evidence originates mainly on programs in high-income countries.<sup>8</sup> Ayala and Rodr ́ıguez (2007) and B ̈ackman

> 6Beneficiaries are obliged to report any change in their income situation as soon as it happens. In addition, they need to update / re-verify their provided information every two years independent of changes.

> 7For instance a series of new studies estimates the long-term impacts of CCT programs on former beneficiaries who reached adulthood. Government efforts to deploy complementary interventions for families to increase chances of exit, or ‘graduation’, are also underpinned by similar assumptions about families’ long-term stagnation in the programs (De Oliveira and Chagas, 2020; Fietz _et al._ , 2021).

> 8There are several explanations for this gap in the research. First, in a large share of CCT programs in developing countries, re-certification processes remain ad-hoc; second, programs adopting proxy means testing are more sensitive to changes in scores when household structural conditions change and less when incomes change, so fluctuations are few. Third, while beneficiaries in Brazil are well balanced between urban and rural areas, in many countries CCTs are mostly focusing on rural poverty, where formal income opportunities are rare. For all these reasons, several countries resort to making their programs time-bound or tied to beneficiary death or

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