Billions of people worldwide travel long distances every day to collect water that is often unsafe for human consumption. Climate change is expected to worsen this critical issue, threatening the economic development of arid regions and posing serious health risks. This paper evaluates a large-scale, low-cost climate adaptation program that built one million rain-fed water storage cisterns in Brazil’s poorest and most drought-prone region. Using unique individual-level administrative data and a difference-in-differences design, we show that the program substantially improved economic and health outcomes, benefiting both adults and children in the household.

Within ten years, family dependency on cash transfers decreased by up to 19 percentage points, while formal job earnings increased by 20%. Hospitalizations associated with waterborne diseases fell by 16% among adults and 37% among children, and families’ compliance with cash transfer conditionalities on child health and education improved. Additional evidence suggests that the economic gains were driven by a reduction in time constraints: cisterns sharply decreased the time burden of water collection, allowing beneficiaries to dedicate more time to productive activities. A cost-benefit analysis indicates a high marginal value of public funds compared to a wide range of public policies.

São Paulo School of Economics (FGV EESP)

Researcher: Daniel da Mata

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