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The Short-Term Impact of COVID-19 on Labor Markets, Poverty and Inequality in Brazil

The Short-Term Impact of COVID-19 on Labor Markets, Poverty and Inequality in Brazil
Author: International Monetary Fund
Publisher: International Monetary Fund
Total Pages: 36
Release: 2021-03-05
Genre: Business & Economics
ISBN: 1513571648

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We document the short-term impact of the COVID-19 pandemic on the Brazilian labor market focusing on employment, wages and hours worked using the nationally representative household surveys PNAD-Continua and PNAD COVID. Sectors most susceptible to the shock because they are more contact-intensive and less teleworkable, such as construction, domestic services and hospitality, suffered large job losses and reductions in hours. Given low income workers experienced the largest decline in earnings, extreme poverty and the Gini coefficient based on labor income increased by around 9.2 and 5 percentage points, respectively, due to the immediate shock. The government’s broad based, temporary Emergency Aid transfer program more than offset the labor income losses for the bottom four deciles, however, such that poverty relative to the pre-COVID baseline fell. At a cost of around 4 percent of GDP in 2020 such support is not fiscally sustainable beyond the short-term and ended in late 2020. The challenge will be to avoid a sharp increase in poverty and inequality if the labor market does not pick up sufficiently fast in 2021.


COVID-19, Labor Market Shocks, Poverty in Brazil

COVID-19, Labor Market Shocks, Poverty in Brazil
Author: Fabio Cereda
Publisher:
Total Pages:
Release: 2020
Genre:
ISBN:

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In this note we estimate the short-term economic impact of the COVID-19 crisis on Brazilian families vis-a-vis labor shocks. The analysis, using a microsimulation model which incorporates subnational shocks from a computable general equilibrium growth model, shows that over 30 million workers in Brazil may see significant reductions in their labor income in 2020 due to the COVID-19 pandemic. Two-thirds of these workers are informal workers or own-account workers, groups without access to unemployment protection. These household shocks would reduce average per capita income by 7.6 percent, with the largest impact on the second and third quintiles of the income distribution. These income shocks are inequality-increasing: without any mitigation measures, inequality would increase by 4 percent. The country's first line of defense, its existing unemployment insurance system, reduces the income shock to 5.3 percent. Even so, an additional 8.4 million Brazilians could fall into poverty. The policy responses announced by the government, and particularly the Auxilio Emergencial (AE) transfer, have the potential to fully absorb the labor income shock for the poorest 40 percent and reduce poverty. Yet, these results reflect annualized income, obscuring the sharp reduction in monthly income if demand shocks persist after the AE ends. Looking towards the next phase of the response, considering extensions of AE that are either less generous or more restricted provide a fiscally prudent approach for continuing to support Brazil's most vulnerable.


The Coronavirus Pandemic and Inequality

The Coronavirus Pandemic and Inequality
Author: Shirley Johnson-Lans
Publisher: Springer Nature
Total Pages: 298
Release: 2023-03-31
Genre: Business & Economics
ISBN: 3031222199

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This book examines the effects of the Covid-19 pandemic on the degree of inequality in wellbeing (income and wealth, health, access to health care, employment, and education) in a number of different countries around the globe. The effect of socioeconomic inequality within a country on the outcome of the pandemic is also considered. This book studies the differential effects of Covid based on location, age, income, education, gender, race/ethnicity, and immigrant status. Special attention is devoted to indigenous populations and those who are institutionalized. The short- and long-term effects of public policy developed to deal with the pandemic’s fallout are studied, as are the effects of the pandemic on innovations in health care systems and likely extensions of public policy instituted during the pandemic to alleviate unemployment, poverty, and income inequality.


Unemployment and Poverty in Brazil

Unemployment and Poverty in Brazil
Author: Neil Turner
Publisher: GRIN Verlag
Total Pages: 33
Release: 2012-12-21
Genre: Social Science
ISBN: 3656339198

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Research Paper (undergraduate) from the year 2012 in the subject Ethnology / Cultural Anthropology, grade: none, , language: English, abstract: Brazil has been struggling with the challenges of unemployment, job inequality, insufficient income from labor and poverty for the past three decades. Although the 1990s and early 2000s showed some economic recovery, raising the expectations that living conditions would be better, conditions have improved very slowly and in some areas worsened. This paper seeks to present an overview of labor market performance in Brazil, how inequality interacts with insufficient income and more specifically its impact and relationship to poverty. It reviews policies and initiatives within a socio-economic context undertaken to address these concerns and the distributional impact of these issues. This paper will also provide analysis of labor trends relative to the challenges of working Brazilian families, issues related to the deterioration of employment conditions, and suggest improvements relative to Brazil’s social, economic and cultural transformation.


Brazil's Social Policy Response to Covid-19

Brazil's Social Policy Response to Covid-19
Author: Elize Massard da Fonseca
Publisher:
Total Pages:
Release: 2020
Genre:
ISBN:

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During the pandemic, Brazil has provided its citizens with support in the areas of long-term care and disability, the labor market, social assistance, education, and pensions. This report focuses on two social policy areas, health-care and family benefits (including labor policies), as these were the most crucial social policies implemented in Brazil during the Covid-19 pandemic in terms of the resources allocated and the magnitude of social impact. Brazil's relatively generous social policies were uncoordinated with public health interventions, which contributed to poor compliance with these public health interventions. This suggests that social policy initiatives alone are insufficient in mitigating the social consequences of the pandemic. They need to be accompanied by and coordinated with public health measures, including regulations on testing, social distancing and mask wearing.


Poverty and Inequality in Brazil

Poverty and Inequality in Brazil
Author: Sonia Rocha
Publisher:
Total Pages: 0
Release: 2000
Genre:
ISBN:

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The persistence of absolute poverty in Brazil is associated with high levels of income inequality. For this article, this association is the departing point for presenting a schematic evolution of poverty in Brazil in the last three decades: a sharp decline in the 70's as income grew at high rates. Fluctuations of poverty incidence following the short-term economic trends in the 80's and early 90's. Finally, the reduction after the 1994 (Real Plan), which brought poverty incidence to a level where it has stabilized since 1995. This stability of poverty incidence for the country as a whole encompasses quite different local situations, for instance, improvements in the Center-West and deterioration in metropolises, specially Sao Paulo. Metropolitan labor market indicators for the last three years show us a sharp decline of the number of jobs for the least qualified workers, which has the effect of adversely affecting poverty and inequality.


Poor and Non-poor in the Brazilian Labor Market

Poor and Non-poor in the Brazilian Labor Market
Author: Sonia Rocha
Publisher:
Total Pages: 38
Release: 1992
Genre: Brazil
ISBN:

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Time and locally specific poverty lines for Brazilian metropolitan areas, which concentrate a third of the country's population, are used for examining the proportion of poor along the short-term cycles, typical of the economic evolution in the 80's. Although the sensibility of poverty to the cycle is high, its long-term effect was neutral in terms of incidente of poverty from the income point of view, but clearly adverse when labor market indicators were considered. National Household Sampling Survey data combined with poverty lines allowed for the construction of labor indicators both for poor and no-poor subpopulations, which are clues to understanding income earning strategies under changing economic and demographic conditions. (AU).


Sustaining Employment and Wage Gains in Brazil

Sustaining Employment and Wage Gains in Brazil
Author: Joana Silva
Publisher:
Total Pages: 0
Release: 2015-08-26
Genre: Labor demand
ISBN: 9781464806445

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In the past 15 years, employment, labor market participation, and wages have grown significantly in Brazil. Improved labor market outcomes have been the main drivers of reductions in poverty and inequality. But job creation is already slowing. Continued progress in employment and labor earnings will depend on the country's ability to achieve a first critical goal: raising labor productivity. Continued improvements in the livelihoods of the poor will depend on the country's ability to achieve a second critical goal: connecting the poor to better, more productive jobs. Sustaining Employment and Wage Gains in Brazil: A Skills and Jobs Agenda analyzes Brazil's labor markets and identifies the key challenges involved in sustaining job creation, wage growth, and poverty reduction. The book discusses reforms of program design and implementation in the policy areas of skills development, unemployment insurance and other labor market regulations, active labor market programs, and productive inclusion programs. The report reviews existing interventions in these four policy areas and proposes an agenda of incremental policy changes that could more effectively support the two critical goals. It also describes specific opportunities in each policy area to better coordinate programs with private sector demands and across policies, while also adapting them to improve the results for the urban and rural poor. An essential first step will be to strengthen monitoring and evaluation systems to measure results by tracking the effects of programs on labor market outcomes and using that information to inform program expansion.


Paths of Inequality in Brazil

Paths of Inequality in Brazil
Author: Marta Arretche
Publisher: Springer
Total Pages: 362
Release: 2018-07-23
Genre: Social Science
ISBN: 9783319781839

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This book presents multidisciplinary analyses of the historical trajectories of social and economic inequalities in Brazil over the last 50 years. As one of the most unequal countries in the world, Brazil has always been an important case study for scholars interested in inequality research, but in the last few decades has brought a new phenomenon to renew researchers’ interest in the country. While the majority of democracies in the developed world have witnessed an increase in income inequality from the 1970s on, Brazil has followed the opposite path, registering a significant reduction of income inequality over the last 30 years. Bringing together studies carried out by experts from different areas, such as economists, sociologists, demographers and political scientists, this volume presents insights based on rigorous analyses of statistical data in an effort to explain the long term changes in social and economic inequalities in Brazil. The book adopts a multidisciplinary approach, analyzing the relations between income inequality and different dimensions of social life, such as education, health, political participation, public policies, demographics and labor market. All of this makes Paths of Inequality in Brazil – A Half-Century of Change a very valuable resource for social scientists interested in inequality research in general, and especially for sociologists, political scientists and economists interested in the social and economic changes that Brazil went through over the last two decades.


The Long Shadow of Informality

The Long Shadow of Informality
Author: Franziska Ohnsorge
Publisher: World Bank Publications
Total Pages: 397
Release: 2022-02-09
Genre: Business & Economics
ISBN: 1464817545

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A large percentage of workers and firms operate in the informal economy, outside the line of sight of governments in emerging market and developing economies. This may hold back the recovery in these economies from the deep recessions caused by the COVID-19 pandemic--unless governments adopt a broad set of policies to address the challenges of widespread informality. This study is the first comprehensive analysis of the extent of informality and its implications for a durable economic recovery and for long-term development. It finds that pervasive informality is associated with significantly weaker economic outcomes--including lower government resources to combat recessions, lower per capita incomes, greater poverty, less financial development, and weaker investment and productivity.