Graduation Year

Spring 2011

Document Type

Open Access Senior Thesis

Degree Name

Bachelor of Arts



Reader 1

Nzinga Broussard

Rights Information

© 2011 Brittany Pineros


This paper investigates the impact of Familias en Acción, a conditional cash transfer program in Colombia, on participant credit behavior. The motivation of the research is derived from previous studies which indicate that conditional cash transfer programs have effects on households aside from those directly intentioned by the programs. While the direct impacts of Familias en Acción have been measured by the research team responsible for evaluating the program, potential indirect effects remain uninvestigated. My research specifically focuses on the impacts of the program on credit behavior. I compute estimates on the percent change in loan balance outstanding and credit participation over the four-year evaluation period by comparing households that are benefiting from the program (treatment) and those that are not (control). Because Familias en Acción was not a randomly assigned program, I use quasi-experimental data collected in three rounds over four years. I control for dissimilarities between the treatment and control group by utilizing a difference-in-differences approach and by controlling across a wide-range of observable household characteristics. I find that the program does affect credit behavior in treated households. In both urban and rural areas, the outstanding loan balance and the number of households involved in the credit market increases after the first year of the program. After four years of the program, the effect is still significant and positive in rural areas though not in urban areas. This indicates that the program affects credit behavior in all treated households in the short run and rural households in the long run. These findings provide new considerations for policy makers who are implementing these programs in developing countries.