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COVID-19, Labor Market Shocks, Poverty in Brazil: A Microsimulation Analysis

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dc.contributor.authorCereda, Fabio
dc.contributor.authorRubiao, Rafael M.
dc.contributor.authorSousa, Liliana D.
dc.date.accessioned2020-08-20T18:59:40Z
dc.date.available2020-08-20T18:59:40Z
dc.date.issued2020-07-31
dc.description.abstractIn 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.en
dc.identifierhttp://documents.worldbank.org/curated/en/883191597258941357/COVID-19-Labor-Market-Shocks-and-Poverty-in-Brazil-A-Microsimulation-Analysis
dc.identifier.doi10.1596/34372
dc.identifier.urihttps://hdl.handle.net/10986/34372
dc.languageEnglish
dc.publisherWorld Bank, Washington, DC
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo
dc.subjectCORONAVIRUS
dc.subjectCOVID-19
dc.subjectLABOR MARKET
dc.subjectPOVERTY
dc.subjectUNEMPLOYMENT
dc.subjectPANDEMIC IMPACT
dc.subjectINFORMAL SECTOR
dc.subjectINEQUALITY
dc.subjectINCOME DISTRIBUTION
dc.subjectSOCIAL PROTECTION
dc.titleCOVID-19, Labor Market Shocks, Poverty in Brazilen
dc.title.subtitleA Microsimulation Analysisen
dc.typePolicy Noteen
dc.typeDocument de politique généralefr
dc.typeDocumento de políticases
dspace.entity.typePublication
okr.crossref.titleCOVID-19, Labor Market Shocks, Poverty in Brazil
okr.date.disclosure2020-08-12
okr.doctypeEconomic & Sector Work
okr.doctypeEconomic & Sector Work::Policy Note
okr.docurlhttp://documents.worldbank.org/curated/en/883191597258941357/COVID-19-Labor-Market-Shocks-and-Poverty-in-Brazil-A-Microsimulation-Analysis
okr.guid883191597258941357
okr.identifier.doi10.1596/34372
okr.identifier.externaldocumentum090224b087c91cf7_2_0
okr.identifier.internaldocumentum32201654
okr.identifier.report151738
okr.importedtrueen
okr.language.supporteden
okr.pdfurlhttp://documents.worldbank.org/curated/en/883191597258941357/pdf/COVID-19-Labor-Market-Shocks-and-Poverty-in-Brazil-A-Microsimulation-Analysis.pdfen
okr.region.administrativeLatin America & Caribbean
okr.region.countryBrazil
okr.topicMacroeconomics and Economic Growth::Business Cycles and Stabilization Policies
okr.topicSocial Protections and Labor::Employment and Unemployment
okr.topicSocial Protections and Labor::Labor Markets
okr.topicSocial Protections and Labor::Social Protections & Assistance
okr.unitPoverty and Equity Global Practice
relation.isAuthorOfPublication0efa1f06-7dd4-5311-b55f-1ad72ad95bb4
relation.isAuthorOfPublication.latestForDiscovery0efa1f06-7dd4-5311-b55f-1ad72ad95bb4
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