Inheriting subsidies: Intergenerational correlation in Conditional Cash Transfers in Colombia

• We combine quantitative & qualitative methods to identify mechanisms behind subsidy inheritance, informing policies for social mobility. • Evidence from Colombia shows intergenerational dependence on Conditional Cash Transfers, a challenge to long-term poverty alleviation. • Policy interventions should focus on fostering upward mobility, reducing welfare dependency, and breaking intergenerational cycles of poverty. • Material conditions and social norms must be addressed to effectively break the cycle of intergenerational welfare dependence. • Long-term mobility and social norm shifts are crucial; short-term cash transfers alone risk perpetuating dependency across generations. This paper aims to analyze the intergenerational dependence on Conditional Cash Transfers (CCTs) in Colombia, specifically focusing on the Más Familias en Acción (MFA) program. It addresses the endogeneity problem often associated with welfare dependency research, which complicates the understanding of whether children benefit from subsidies due to their parents’ prior participation or shared characteristics. By employing a mixed-methods approach that combines qualitative interviews and quantitative surveys, the study aims to establish causal relationships regarding the transmission of subsidy dependency across generations. Our findings from the quantitative estimations reveal a significant and causal correlation between parental and child participation in the MFA program, suggesting that having a parent who received the transfer increases the likelihood of the child receiving it as well. The qualitative findings enrich our understanding of intergenerational subsidy dependence by uncovering the interplay between structural constraints and cultural norms, which reveals that subsidy dependance is the result of a dynamic process shaped by limited economic opportunities, socialization within beneficiary families, and a perceived absence of state alternatives. This research highlights the importance of understanding the mechanisms behind intergenerational subsidy dependence, emphasizing the need for anti-poverty programs to foster upward mobility rather than perpetuating welfare dependency. Our paper contributes to the literature by providing rigorous evidence on the implications of CCTs for family dynamics and policy design.