Dose response effect of the constitutional fi nancing fund of middle west (FCO) in the Goias state

Abstract The study evaluates the Constitutional Financing Fund for the Center-West (FCO) in the state of Goiás between the years 2004 and 2011, using Rais microdata, and loans from the FCO "Empresarial" Program. The results show a positive and statistically significant impact of the FCO on employment and wage growth at the firm level. We use the Propensity Score Matching (PSM) and the Generalized Propensity Score (GPS) methods. The GPS treats the treatment variable as continuous, therefore, verifies the heterogeneous effects instead the average impact. Moreover, the dose response results indicate that the loans values affect wages and employment. The evidences presented suggest new heterogeneous patterns in the program effect and complement the results previously reported in the literature.