Informality and the resumption of services lead to a reduction in unemployment, points out Ipea

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The reduction in unemployment in Brazil throughout 2021 was driven by the increase in informal work and the recovery in the services sector.

The conclusion is a study by the Institute for Applied Economic Research (Ipea), published in the Labor Market Bulletin: conjuncture and analysis, produced by the institute. The two attributes combined helped to reduce the unemployment rate, which dropped from 14.7% in March to 13.7% in June.

The study used information from the two main employment surveys in the country: the National Household Sample Survey (PNAD Continua), by IBGE, and the General Register of Employed and Unemployed (Caged), by the Ministry of Labor and Social Security, recreated in July by President Jair Bolsonaro through a Provisional Measure. The portfolio’s attributions had been linked to the Ministry of Economy since the beginning of the current government.

The survey also shows that, despite the gradual recovery observed in the labor market as of July 2021, workers’ earnings dropped by 2.2%, something the institute attributes to the impact of the pandemic.

Editor of the publication and researcher at IPEA, Sandro Pereira Silva understands that the levels presented by the research give rise to concern, despite showing improvement.

“Unemployment and informality rates are still at high levels. On the other hand, studies show that the pace of recovery of the employed population has been increasing in recent months, to the point of reducing the unemployment rate. There were also worrying variations in indicators of despondency, underemployment and income from work”, he stated.

According to the Continuous PNAD released in October by the IBGE, the country has 13.7 million people looking for work. The number of employed workers grew 4% and reached 90.2 million. Thus, the occupancy level is at 50.9%. In one year, according to the IBGE survey, the number of people employed increased by 8.5 million people.

At the time, the survey also indicated that this increase in occupation in the period was driven by the expansion of informality, which represented 41.1% of jobs in the quarter ended in August. A reality for the lives of 37 million people: more than the number of workers with a formal contract in the private sector: 31 million people.

The survey also showed that Brazil has 5.3 million discouraged people: people who stopped looking for work because of the structural conditions of the market. The number dropped 6.4% in the previous quarter. Compared to the same period last year, there were 5.9 million Brazilians in this situation.

Reference: CNN Brasil

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