Cyclical Variations in Participation and Employment in Urban Brazil
Brazilian labor markets have performed very strongly for most of the last 15 years, with dramatic increases in the employment rate of unskilled workers and significant declines in the overall unemployment rate. However, the economic and political d...
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World Bank, Washington, DC
2016
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| Online Access: | http://documents.worldbank.org/curated/en/2016/07/26595754/cyclical-variations-participation-employment-urban-brazil http://hdl.handle.net/10986/24952 |
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okr-10986-249522021-05-25T08:50:55Z Cyclical Variations in Participation and Employment in Urban Brazil Skoufias, Emmanuel Gukovas, Renata Scot, Thiago labor force employment Brazilian labor markets have performed very strongly for most of the last 15 years, with dramatic increases in the employment rate of unskilled workers and significant declines in the overall unemployment rate. However, the economic and political developments and fiscal crisis of the last sixteen months in Brazil have resulted in a substantial decline in the rate of economic activity , a dramatic slowdown in the rate of new job creation a devaluation of the domestic currency and increasing concerns about the sustainability of the gains in poverty reduction and inequality accomplished during the years of the commodity boom. The decline in economic activity has raised concerns again about increasing unemployment rates, and the extent to which these developments will have an adverse impact on specific age and gender groups. Efforts to maintain or increase the proportion of the population employed in the aggregate or within any specific demographic group must take into consideration how the unemployment rate and the labor force participation rate of the group vary with changes in the level of economic activity. The sensitivity of the proportion of the population employed to changes in the level of aggregate demand is a key parameter informing the design of an appropriate and effective labor market policy. Specifically, teenagers and young women between 20-34 years of age comprise only 25 percent of the adult population, but they account for more than 50 percent of the cyclical variation in employment. In contrast, adult men between 26 and 64 years of age, who comprise 32.6 per cent of the population in the US account for only 23.6 percent of the change in the cyclical variation in employment. Estimates of the sensitivity of the proportion of the population employed to changes in the level of aggregate demand based on data from recent years that reflect the prevailing structural relationships between labor demand and employment and labor supply, labor force participation and unemployment are more useful for predicting how labor force participation is likely to react to the downturn in economic activity since the end of the commodity boom and the onset of the economic crisis in Brazil. The purpose of this paper is to examine two inter-related questions about the behavior of the labor market in Brazil. The first question is about the direction and sensitivity of the labor force participation rate, and the employment rate to changes in the level of aggregate demand. The second question relates to the differences in the cyclical sensitivity of these key variables across age and gender groups.The next section of the paper discusses the recent macroeconomic context, and some of the limitations associated with using Pesquisa Nacional por Amostra de Domicílios (PNAD) data to predict changes in the on the labor force participation rate of different age gender and skill groups during the crisis. Section 3 discusses the data and the model used 2016-08-25T21:06:12Z 2016-08-25T21:06:12Z 2016-05-01 Report http://documents.worldbank.org/curated/en/2016/07/26595754/cyclical-variations-participation-employment-urban-brazil http://hdl.handle.net/10986/24952 English en_US CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Economic & Sector Work Economic & Sector Work :: Other Poverty Study Latin America & Caribbean Brazil |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
labor force employment |
| spellingShingle |
labor force employment Skoufias, Emmanuel Gukovas, Renata Scot, Thiago Cyclical Variations in Participation and Employment in Urban Brazil |
| geographic_facet |
Latin America & Caribbean Brazil |
| description |
Brazilian labor markets have performed
very strongly for most of the last 15 years, with dramatic
increases in the employment rate of unskilled workers and
significant declines in the overall unemployment rate.
However, the economic and political developments and fiscal
crisis of the last sixteen months in Brazil have resulted in
a substantial decline in the rate of economic activity , a
dramatic slowdown in the rate of new job creation a
devaluation of the domestic currency and increasing concerns
about the sustainability of the gains in poverty reduction
and inequality accomplished during the years of the
commodity boom. The decline in economic activity has raised
concerns again about increasing unemployment rates, and the
extent to which these developments will have an adverse
impact on specific age and gender groups. Efforts to
maintain or increase the proportion of the population
employed in the aggregate or within any specific demographic
group must take into consideration how the unemployment rate
and the labor force participation rate of the group vary
with changes in the level of economic activity. The
sensitivity of the proportion of the population employed to
changes in the level of aggregate demand is a key parameter
informing the design of an appropriate and effective labor
market policy. Specifically, teenagers and young women
between 20-34 years of age comprise only 25 percent of the
adult population, but they account for more than 50 percent
of the cyclical variation in employment. In contrast, adult
men between 26 and 64 years of age, who comprise 32.6 per
cent of the population in the US account for only 23.6
percent of the change in the cyclical variation in
employment. Estimates of the sensitivity of the proportion
of the population employed to changes in the level of
aggregate demand based on data from recent years that
reflect the prevailing structural relationships between
labor demand and employment and labor supply, labor force
participation and unemployment are more useful for
predicting how labor force participation is likely to react
to the downturn in economic activity since the end of the
commodity boom and the onset of the economic crisis in
Brazil. The purpose of this paper is to examine two
inter-related questions about the behavior of the labor
market in Brazil. The first question is about the direction
and sensitivity of the labor force participation rate, and
the employment rate to changes in the level of aggregate
demand. The second question relates to the differences in
the cyclical sensitivity of these key variables across age
and gender groups.The next section of the paper discusses
the recent macroeconomic context, and some of the
limitations associated with using Pesquisa Nacional por
Amostra de Domicílios (PNAD) data to predict changes in the
on the labor force participation rate of different age
gender and skill groups during the crisis. Section 3
discusses the data and the model used |
| format |
Report |
| author |
Skoufias, Emmanuel Gukovas, Renata Scot, Thiago |
| author_facet |
Skoufias, Emmanuel Gukovas, Renata Scot, Thiago |
| author_sort |
Skoufias, Emmanuel |
| title |
Cyclical Variations in Participation and Employment in Urban Brazil |
| title_short |
Cyclical Variations in Participation and Employment in Urban Brazil |
| title_full |
Cyclical Variations in Participation and Employment in Urban Brazil |
| title_fullStr |
Cyclical Variations in Participation and Employment in Urban Brazil |
| title_full_unstemmed |
Cyclical Variations in Participation and Employment in Urban Brazil |
| title_sort |
cyclical variations in participation and employment in urban brazil |
| publisher |
World Bank, Washington, DC |
| publishDate |
2016 |
| url |
http://documents.worldbank.org/curated/en/2016/07/26595754/cyclical-variations-participation-employment-urban-brazil http://hdl.handle.net/10986/24952 |
| _version_ |
1764457967613116416 |