South-Western College Publishing - Economics  
Brazilians get paid to go to school
Subject Government pays parents to keep children in school
Topic Government and the Economy; Poverty and Inequality
Key Words

Poverty, Welfare, Work

News Story

Brazilian parents who make sure that their children stay in school and get regular medical checkups now qualify for a monthly cash payment from their government. The goal is to ensure that the families are investing in the future of their children, rather than having the children work during the day.

Under the new Family Grant, Brazil's President Luis Inacio Lula da Silva consolidated a number of welfare programs and increased the benefits to $24 a month to parents whose children remain in school. This will help offset the need for the children to work during the day rather than go to school. Brazil is funding the program through savings in its pension program, as well as loans from the World Bank and the InterAmerican Development Bank. This program will cost approximately US$7 billion through 2006 , and will ultimately reach 45 million people in Brazil.

This program of providing families with incentives for their children to remain in school has been extremely popular and widely received across Latin America. In fact, da Silva's predecessor and rival had implemented the program on a national scale in 2001. Other Latin American countries have implemented similar programs, and a rigorous study of a similar program in Mexico showed that children in the program are healthier, better nourished, and remain in school longer.


(Updated February, 2004)

Questions
1.

It has been said that once in poverty, it is very difficult to get out of it. Why will programs like this help break this cycle of poverty?

2. How does society benefit when children receive educations and medical checkups? Explain carefully.
3. Even though this program is expensive, what long-term savings in government programs can help this program pay for itself in the long term?
Source Celia W Dugger, "Brazil Pays Parents to Help Poor be Pupils, Not Wage Earners." The New York Times. 3 January 2004.

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