The Effects of Emergency Government Cash Transfers on Beliefs and Behaviours During the COVID Pandemic: Evidence from Brazil

This paper examines the impacts of emergency cash-transfers on individuals' social distancing behaviour and beliefs about COVID-19. We focus on the impacts of "Auxilio Emergencial" (AE): a large-scale cash-transfer in Brazil targeting low-income individuals who were unemployed or informally employed during the pandemic. To identify causal effects we exploit exogenous variation, arising from the AE design, in individuals' access to the cash-transfer programme. Using data from an online survey, our results suggest that eligibility to the emergency cash transfer led to a reduced likelihood of individuals contracting COVID-19, likely to have been driven by a reduction in working hours. Moreover, the cash transfer seems to have increased perceptions about the seriousness of coronavirus, while also exacerbating misconceptions about the pandemic. These findings indicate effects of emergency cash-transfers in determining individuals' narratives about a pandemic, in enabling social distancing and potentially in reducing the spread of the disease.