Cyclical Variations in Participation and Employment in Urban Brazil

Skoufias, Emmanuel ; Gukovas, Renata ; Scot, Thiago

World Bank, Washington, DC

关键词: labor force;    employment;   

RP-ID  :  106936

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Brazilian labor markets have performedvery strongly for most of the last 15 years, with dramaticincreases in the employment rate of unskilled workers andsignificant declines in the overall unemployment rate.However, the economic and political developments and fiscalcrisis of the last sixteen months in Brazil have resulted ina substantial decline in the rate of economic activity , adramatic slowdown in the rate of new job creation adevaluation of the domestic currency and increasing concernsabout the sustainability of the gains in poverty reductionand inequality accomplished during the years of thecommodity boom. The decline in economic activity has raisedconcerns again about increasing unemployment rates, and theextent to which these developments will have an adverseimpact on specific age and gender groups. Efforts tomaintain or increase the proportion of the populationemployed in the aggregate or within any specific demographicgroup must take into consideration how the unemployment rateand the labor force participation rate of the group varywith changes in the level of economic activity. Thesensitivity of the proportion of the population employed tochanges in the level of aggregate demand is a key parameterinforming the design of an appropriate and effective labormarket policy. Specifically, teenagers and young womenbetween 20-34 years of age comprise only 25 percent of theadult population, but they account for more than 50 percentof the cyclical variation in employment. In contrast, adultmen between 26 and 64 years of age, who comprise 32.6 percent of the population in the US account for only 23.6percent of the change in the cyclical variation inemployment.Estimates of the sensitivity of the proportionof the population employed to changes in the level ofaggregate demand based on data from recent years thatreflect the prevailing structural relationships betweenlabor demand and employment and labor supply, labor forceparticipationand unemployment are more useful forpredicting how labor force participation is likely to reactto the downturn in economic activity since the end of thecommodity boom and the onset of the economic crisis inBrazil. The purpose of this paper is to examine twointer-related questions about the behavior of the labormarket in Brazil. The first question is about the directionand sensitivity of the labor force participation rate, andthe employment rate to changes in the level of aggregatedemand. The second question relates to the differences inthe cyclical sensitivity of these key variables across ageand gender groups.The next section of the paper discussesthe recent macroeconomic context, and some of thelimitations associated with using Pesquisa Nacional porAmostra de Domicílios(PNAD) data to predict changes in theon the labor force participation rate of different agegender and skill groups during the crisis. Section 3discusses the data and the model used