Growth, Employment and Poverty in Brazil Ricardo Barros Mirela de Carvalho Samuel Franco Brasília, January 2005.

Presentación del tema: "Growth, Employment and Poverty in Brazil Ricardo Barros Mirela de Carvalho Samuel Franco Brasília, January 2005."— Transcripción de la presentación:

1 Growth, Employment and Poverty in Brazil Ricardo Barros Mirela de Carvalho Samuel Franco Brasília, January 2005

2 1. A very abbreviated analytical framework

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4 1a. The response of labor demand to growth depends on the sources of growth

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6 1b. The response of employment and labor income to changes in labor demand depends on: (i) the degree of integration of labor markets and (ii) the broadness of the changes in labor demand

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8 1c. Wage flexibility could be an effective instrument to reduce inequality and poverty

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10 Baseline (2003) 42234,114,5 After unemployment is eliminated 42232,012,8 Impact on poverty (%)......6,211,8 Impact on poverty of eliminating unemployment in Brazil, holding constant total earnings Mean income Poverty Extreme poverty Alternatives

11 Relationship between employment and GDP 0,00 1,00 2,00 3,00 4,00 5,00 6,00 7,00 8,00 9,00 10,00 020406080100120140160180200 GDP (R$ billions/year) employment (million) Espírito Santo Ceará Pernambuco

12 IndicatorsCearáEspírito Santo Average earnings (1000 R$ per year) 3,56,3 Employment (millions) 3,31,5 Total earnings (in billions of R$ per year) 11,69,6 GDP* (in billions of R$ per year) 23,022,0 Total earnings as a share of GDP (%) 50,643,7 Employment, earnings and production level

13 2. Agriculture development and rural poverty in Brazil over the last decade

14 Qualificação dos trabalhadores agrícolas Produção agrícola Trabalho agrícola Pobreza rural Integração dos mercados agrícola e não agrícola Previdência rural Qualidade dos postos de trabalho Atividades não agrícolas pela população rural Demografia Preços agrícolas Mudanças tecnológicas Labor force qualification Agriculture production Agriculture Labor market Rural poverty Agro and non agro labor market integration Social security Rural poverty determinants Job quality Non agro activities for rural families Demographics Agricultural prices Technological progress

15 Evolution of rural poverty Workers in agriculture 50 51 52 53 54 55 56 57 58 59 60 19921993199419951996199719981999200020012002 year Poverty headcount (%) 7.6

16 Evolution of the terms of trade in agriculture 95 105 115 125 135 145 19921993199419951996199719981999200020012002 year Relative prices (1990=100) 13%

17 Variation (1995-1985) Production level 16% Inputs -8% Total factor productivity 26% Growth in productivity: 1985-1995

18 Evolution of agriculture production 90 100 110 120 130 140 19921993199419951996199719981999200020012002 year Production quantum (1990=100) 37%

19 Evolution of labor force and earnings in agriculture over the last decade 12.0 12.5 13.0 13.5 14.0 14.5 15.0 15.5 16.0 16.5 17.0 17.5 18.0 18.5 19.0 19921993199519961997199819992001 year Agriculture labor force (millions) 140 145 150 155 160 165 170 175 180 185 190 195 200 Average earnings in agriculture (R$/month) Labor forceEarnings in agriculture 11% -15%

20 Expressions for the household per capita income f y  household per capita income f d  proportion of adults f r  average earnings among adults

21 f y  household per capita income f d  proportion of adults f t  average labor earnings among adults f o  average non labor income among adults Expressions for the household per capita income

22 f y  household per capita income f d  proportion of adults af t  average agriculture labor earnings among adults fna t,  average non agriculture labor earnings among adults - f o  average non labor income among adults

23 Expressions for the household per capita income f y  household per capita income f d  proportion of adults f p  proportion of adults working in agriculture f s  average labor earnings among agriculture workers fna t,  average non agriculture labor earnings among adults - f o  average non labor income among adults

24 Household per capita income that would prevail in 1992, if the distribution of labor earnings in agriculture were that prevailing in 2001

25 Impact on poverty of changes in labor earnings per agriculture worker 50 52 54 56 58 60 19921992 if labor earnings per agriculture worker were that prevailing in 2001 2001 19% Impact of changes in labor earnings per agriculture worker

26 Household per capita income that would prevail in 1992, if the distribution of agriculture labor earnings per adult were that prevailing in 2001

27 Impact on poverty of changes in the proportion of adults working in agriculture 50 52 54 56 58 60 1992 1992 if labor earnings per agriculture worker were that prevailing in 2001 1992 if agriculture labor earnings per a dult were that prevailing in 2001 2001

28 Household per capita income that would prevail in 1992, if the distribution of labor earnings per adult were that prevailing in 2001

29 Impact on poverty of changes in non agriculture labor earnings per adult 50 52 54 56 58 60 19922001 2% Impact of changes in non agriculture labor earnings per adult 1992 if labor earnings per were that prevailing in 2001 agriculture worker 1992 if agriculture labor earnings per a dult were that prevailing in 2001 1992 if labor earnings per a dult were that prevailing in 2001

30 Household per capita income that would prevail in 1992, if the distribution of income per adult were that prevailing in 2001

31 Impact on poverty of demographic changes and the impact of changes in non labor earnings 50 52 54 56 58 60 73% Impact of changes in non labor income 21% Impact of demographic changes 1992 1992 if labor earnings per were that prevailing in 2001 agriculture worker 1992 if agriculture labor earnings per a dult were that prevailing in 2001 1992 if labor earnings per a dult were that prevailing in 2001 2001 1992 if income per a dult were that prevailing in 2001

32 Conclusion An important increase in non labor income of rural families was the main factor explaining the sharp reduction in rural poverty over the last decade in Brazil.

33 3. Economic growth and poverty in Brazil over the last decade

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50 Modelos Ingreso total familiar (mil millones de R$ por año) Mejora en el ingreso familiar (mil millones R$ por año) Brecha en el ingreso de las familias pobres (mil millones R$ por año) Mejora en el Ingreso que beneficia a las familias pobres (mil millones R$ por año) % de la mejora del ingreso que beneficia a las familas pobres Reducciónde la brecha de ingresos de las familias pobres (%) Línea de base (2002) 657,6---42,8--- Empleados formales que ganen cerca del salario mínimo 658,20,742,50,3 42 0,7 Beneficiarios de la seguridad social con beneficios cercanos al salario mínimo 660,0 2,4 42,20,6 24 1,4 Empleados formalesy beneficiarios de la seguridad social con beneficios cercanos al salario mínimo 660,7 3,1 41,9 0,9 28 2,1 658,6 0,9 41,9 0,9 1002,1 El impacto de cambios en el salario mínimo y de los benficios de la Bolsa Familia en el nivel de pobreza Impacto en el ingreso familiar de un aumento del 10% en el salario mínimo: Impacto al aumentar el beneficio básico de Bolsa Famíliaen R$17,5 por familia por mes

51 Indicators Poor Extremely poor Poverty rate among formal employees with earnings near the minimum wage 317 Percentage of poor families with at least one formal worker with earnings near the minimum wage 149 Percentage of poor families without any formal worker with earnings near the minimum wage 8691 Minimum wage and poverty in Brazil

52 Distribution of workers according to the percentiles of the distribution of family per capita income 0,0 0,5 1,0 1,5 2,0 2,5 3,0 0102030405060708090100 Percentiles of the distribution Percentage of workers by percentile Formal employees (1 a 1.25 SM) Self-employed works in Maranhão