In the last panel of the event Brazil: Macroeconomic Stability, Climate Change and Social Progressorganized by XP’s private bank on Friday (21), experts discussed how public policies can reduce poverty and inequality in Brazil and support economic growth in the country.
Sérgio Firpo, National Secretary for Monitoring and Evaluation of Public Policy at the Ministry of Planning and Budget, stressed that Bolsa Familia have been fundamental to reduce poverty, but said, the program also has side effects, such as increased informality.
“It seems that these rules to be included in the program can induce informality,” said Firpo. He explained that the possibility of continuing to receive part of the benefit even after surpassing the income limit can encourage workers to prefer informal jobs not to lose access to the program.
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The secretary highlighted advances in the Single Registry, which today covers 94 million Brazilians and is integrated with other databases, such as formal employment records. This has allowed more accurate monitoring of beneficiaries and their income levels. “We are doing a much better job now than in the past, and this has to do with the fact that we are able to see at least formal income,” he said.
William F. Maloney, World Bank’s chief economist for the Latin America and Caribbean region, highlighted the relationship between risk and inequality in economies such as Brazil. According to him, the issue of risk in the labor market has direct implications for social mobility and income distribution statistics.
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By comparing Brazil with other countries, Maloney pointed out that the Brazilian economy has a risk level in the labor market approximately twice as much as the United States. “Honduras is four or five times more risky, Brazil is about twice more dangerous,” he said. According to him, reducing this risk could generate additional income of income, as indicated by the findings of the Krebs study.
Maloney suggested that public policies designed to reduce inequality should consider the size of risk in the labor market. For him, Brazil seems less unequal than the United States when the risk is adjusted, but differences remain significant.
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Also participated in the panel Claudio Ferraz, economy professor at Vancouver School of Economics; and Nércio Menezes Filho, professor of economics at Insper.
