Respuestas en los ingresos frente a un programa de transferencias monetarias: evidencia de un notch a partir de registros administrativos de Uruguay

This work examines the discontinuity created by the income test of the main cash transfer program of Uruguay, to derive the responses of lower-incomes households to the incentives of the policy. Program administrative microdata matched with social security records and a novel methodology for the analysis of behavioral responses to transfers has allowed us to complement the evidence of the effects of this type of program on the labor market, analyzing the impacts in the intensive margin. Our main results from bunching estimations show that there was no significant effect on reported formal income, or when considering different characteristics of the household and the employment of its members. Since the low salience of the eligibility threshold could be a potential explanation for the lack of responses, we implemented an event study analysis of the beneficiaries who experienced a temporary suspension or exclusion from the program. In this case, there is evidence of significant responses from this subgroup of households, which suggests that the salience of the program design could explain part of the responses in the intensive margin. The contributions of this paper are twofold. First, explores the intensive margin responses, an aspect less studied in the literature on the effects of CCT programs. Secondly, it focuses on a notch in budget constraint to derive the responses, a discontinuity less employed in the growing literature on bunching. Furthermore, the results of this paper have implications for the design of public policies, showing the importance of the degree of salience to explain the effects of this type of program.