Welfare Dependence and Poverty Traps

The poor are more vulnerable to disease, and poor health can perpetuate poverty and welfare dependency. This project will contribute new evidence on synergies between income support and public health, relevant to sustaining cash transfers on a wide scale, especially under austerity. It will also contribute to work on sustainable cities insofar as epidemics that diffuse more rapidly in dense urban areas will be studied. Previous attempts to identify causal effects of health on poverty have been frustrated by the poor being more likely to suffer health shocks, making it hard to isolate cause from effect. This challenge will be addressed by analysing administrative individual longitudinal data on the entire population of welfare recipients in Brazil, linked to hospital, clinic and vital statistics data, and using exogenous variation in local epidemic infection rates.