The rate fell to 5.6% in the quarter ended in August, repeating the lowest level in the Contínua Pnad series. In the same period, it reached 38% of employed people, equivalent to 38.9 million people. The country is experiencing an apparent paradox: there are more people employed, but a large proportion do not have access to .
In commerce, the contrast is visible. According to estimates from local entities in and from Bom Retiro, large centers in São Paulo, there are more than 11 thousand open vacancies that are difficult to fill; the sector cites rising costs and high turnover, while many workers prefer . In this context of low unemployment, the choice reflects . The data reinforce the discrepancy: there are 39.1 million registered employees, there are still 13.5 million without registration and 25.9 million self-employed.
The new publication by JOI Brasil, from the J-PAL initiative, in partnership with the Inter-American Development Bank (IDB), helps to understand this behavior. The document shows that direct and visible benefits increase adherence to formalization. When the worker sees an immediate return, such as easier access to credit or tax support, the willingness to register the business increases. This is what De Mel, McKenzie and Woodruff pointed out in Sri Lanka, where transfers conditional on registration increased the number of formal companies, and Benhassine and colleagues in Benin, when combining training and tax guidance.
Reducing bureaucracy also helps, albeit in a limited way. In Malawi, separating the registration process from tax obligations increased formalization; In Brazil, the creation of the (individual micro entrepreneur) has expanded access to formalization, but is at a high risk and presents mixed evidence on its effectiveness, with many studies not finding substantial increases in sales or profits after formalization.
Combining simplification with direct support shows the most consistent results. In Rio de Janeiro, in-person and individualized services increased registration and compliance, while automatic messages had no effect. In Benin, a similar intervention expanded formalization in a sustained manner.
The gains, however, are concentrated among entrepreneurs and firms closer to the formal profile, which makes it essential to take an even more careful look at workers at the base of the pyramid. The JOI Brasil and IDB synthesis also reinforces that they tend to have high fiscal costs and modest results, while focused designs, which combine simplification with personalized assistance, present better performance and cost-effectiveness.
Commerce is an opportunity to resume the debate on the large number of informal workers. Without a discussion about the work format and redesign of working hours and remuneration system, the uptake of vacancies in the formal market will remain limited. In a market with income options in more flexible models, the path for employers and governments is to make formal employment more attractive, combining simplification with practical support and better work design.
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