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Brazil - Employment and Earnings
mployment and Earnings
Employment
Since World War II, the level of employment in Brazil has coincided
generally with the expansion of the country's labor force. However,
there have been considerable changes in the occupational structure
. The period from 1950 to 1970 witnessed slow growth in agricultural
employment and a rapid increase in typically urban occupations,
notably commerce and services but also industry (manufacturing,
construction, and mining). The period from 1970 to 1980 was one
of very rapid growth in employment, led by industry, resulting from
a decade of marked economic expansion. The period
between 1980 and 1990 saw an expansion of employment, led by
segments of the services sector, despite the sluggish economy.
In the 1950-70 phase, the employed population went from 17.1 million
people to 29.6 million, increasing at a 2.7 percent annual rate,
similar to the rate of population growth. This expansion was led
by the services sector, with 4.6 percent annual growth. Industrial
employment also expanded significantly, with 3.9 percent annual
growth. However, industrial labor expansion was quite a bit slower
than the sector's growth in real product in the period (7.9 percent
annually). In turn, employment in the primary sector experienced
only a small increase of 1.3 percent annually, much less than the
sector's growth in real product in the period (4.5 percent annually).
In the 1950s and 1960s, the output elasticity (see Glossary) of
employment was very small, not only for agriculture
but also for industry,
the economy's dynamic sector.
The share of agriculture in total employment fell from almost 60
percent in 1950 to 44.3 percent in 1970, that of the industrial
sector increased from 14.2 percent to 17.9 percent, and that of
the services sector increased from 25.9 percent to 37.8 percent.
Another change in the period was the increase in the number of women
in the labor force, from 13.6 to 18.5 percent. The male participation
rate declined from 80.8 to 71.8 percent.
The 1970-80 period saw very rapid economic expansion. In the 1970s,
GDP grew 8.7 percent annually; industry, 9.5 percent; and agriculture,
4.4 percent. In the same period, the employed population increased
3.9 percent annually, from 29.6 million to 43.9 million persons.
This time, the expansion in total employment was led by industry,
with a 6.7 percent annual growth rate. The services sector's labor
force grew 5.9 percent annually. As a result of conservative modernization,
agriculture's labor force experienced a small reduction, from 13.3
million persons in 1970 to 13.0 million in 1980.
By 1980 the share of agricultural employment had fallen to 30.1
percent, that of industry had increased to 23.9 percent, and that
of the services sector, to 46.0 percent. The number of women in
the labor force continued to increase, from 18.5 percent in 1970
to 27.4 percent in 1980; the male participation rate changed little,
from 71.8 to 72.4 percent.
During the 1980-90 period, total employment increased, despite
the sluggish economy. Between 1981 and 1990, the average rate of
GDP growth was only 1.6 percent annually; industry averaged only
0.5 percent annual growth; agriculture, 2.6 percent; and the services
sector, 2.7 percent. Total employment, however, increased 2.8 percent
annually, from 43.9 million to 62.1 million persons. The average
rate of unemployment in the period jumped from around 4 percent
in the still prosperous years of 1979 and 1980 to more than 6 percent
(average for the nine major metropolitan regions) in the depressed
1981-84 period; thereafter, it declined, falling to 3.6 percent
in 1986. However, even with the return of stagnation, open unemployment
increased only slightly.
Despite a decline of 4.0 percent in GDP, the unemployment rate
was only 4.3 percent in 1990, as opposed to 7.9 percent in 1981.
Meanwhile, an extensive informal economy (see Glossary) expanded,
acting as a cushion and absorbing a growing number of people that
the formal sector failed to employ. The informal sector included
not only large numbers of street vendors, peddlers, and providers
of petty services but also large numbers of middle-class workers
as artisans, self-employed agents, and backyard business operators.
Moreover, established businesses used the informal sector as a means
of avoiding taxes, increased regulations, and the costs associated
with being registered as employed.
Brazil lacks precise data on informal-sector employment, but there
are indications of its expansion since 1980. For instance, between
1980 and 1990 the share of employees in the total employed urban
labor force fell from 78.7 percent to 74.6 percent, and the share
of the self-employed (many in the informal sector) rose from 17.2
percent to 19.1 percent. Furthermore, the proportion of workers
with formal labor contracts declined considerably in most urban
economic segments. This was certainly true in areas where the informal
sector traditionally has prevailed, such as personal services, entertainment,
construction, and commerce; but, it was also true in the more organized
sectors, such as manufacturing.
In the 1990-92 period, the economy deteriorated further, with a
1.3 percent annual decline in GDP and 4.1 percent decline in industrial
output. Agriculture grew only 1.5 percent, and the services sector,
only 0.4 percent annually. The overall unemployment rate increased
from 3.4 percent in 1989 to 4.3 percent in 1990, 4.2 percent in
1991, and 5.8 percent in 1992. The labor absorption by the informal
sector continued to be large and highly visible.
In 1992 the share of agriculture in the country's employed labor
was 9.4 percent and that of industry, 16.0 percent. As a result
of the swollen informal sector, employment in the services sector
increased to 57.4 percent. The female participation rate continued
to increase, from 27.4 percent in 1980 to 38.9 percent in 1990.
In 1990 women made up 35.5 percent of the labor force compared with
15 percent in 1950. The male participation rate increased from 72.4
to 75.3 percent between 1980 and 1990.
Data as of April 1997
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