Sustainable Inclusive Growth in Brazil: Past Achievements and Challenges Ahead

Transcrição

1 Sustainable Inclusive Growth in Brazil: Past Achievements and Challenges Ahead Ricardo Paes de Barros (IAS/Insper), Diana Coutinho (IAS), Marina de Cuffa (IAS/Insper), Samuel Franco (OPE Sociais), Beatriz Garcia (Insper/IAS), Rosane Mendonça (UFF), Laura Müller Machado (IAS/Insper), Camila Soares (IAS/Insper) Brasília October, 2017

2 1 Achievements

3 1. Achievements

4 1. Achievements

5 percentage of the population below the extreme poverty line 1. Achievements 26 Evolution of the Extreme Poverty in Brazil MDG Reduction in extreme poverty 4 times faster than required by the MDG 4 2 MDG met 10 years in advance

6 percentage of the population below the poverty line 1. Achievements 45 Evolution of Poverty in Brazil ,7 38,3 39,4 36,9 34, ,7 28,0 25,2 23,8 Reduction in poverty 2,5 faster than required to reduce to 1/2 in 25 years 20 20, ,0 17,0 15,3 17,

7 percentage of the population below the poverty line 1. Achievements ,7 38,7 38,7 38,3 21,6 41,1 39,4 39,5 36,9 With reduction in inequality Evolution of Poverty in Brazil 37,5 34,2 34,5 29,7 33,5 28,0 31,8 25,2 31,1 23,8 without reduction in inequality Almost ½ of the reduction in poverty is due to the reduction in inequality 28,6 20,6 26,7 18,0 25,5 17,0 24,7 15,3 11,8 26,9 17,

8 1. Achievements 5,0% Average annual growth rate of the labor income per worker by tenths of the income distribution: Brazil, ,5% 4,0% 3,5% 3,0% 2,5% 2,0% 1,5% 1,0% 0,5% 0,0% First Second Third Fourth Fifth Sixth Seventh Eigth Ninth Tenth

9 average annual growth rate (%) 1. Achievements Average annual growth rate of labor income per worker by percentile 5,0% 4,5% 4,0% 3,5% 3,0% 2,5% 2,0% 1,5% 1,0% 0,5% 0,0% -0,5% -1,0% -1,5% percentile of the income distribution

10 Monthly average earnings (R$ of 2014) unemployment rate 1. Achievements 1800 Evolution of the Main Brazilian Labor Market Indicators II 12,0% Average Earnings real wage increase 44% in 10 years 9,0% R$1,731 11,0% 10,0% 9,0% unemolyment rate declined almost two percentage points in 10 years 7,0% 8,0% 7,0% R$1,199 Unemployment Rate 6,0% 5,0% ,0%

11 Minimum wage (R$ of 2015) percentage of the labor force in the formal sector 1. Achievements Evolution of the Main Brazilian Labor Market Indicators I real minimum wage doubled in 20 years R$872 51% 54,0 52,5 51, ,5 48, % Minimum Wage Degree of Formalization the degreee of formalization increased 10 percentage points 46,5 45,0 43,5 42, ,5 400 R$440 39, , ,

12 1. Achievements Determinantes do diferencial da renda per capita do 1º Décimo: Área Total Determinantes Brasil 2001 Brasil 2015 Diferencial Contribuição Renda per capita ,0% 100% Porcentagem de adultos 51% 60% 1,1% 13% Renda nào derivada do trabalho por adulto ,6% 56% Taxa de ocupação (%) 48% 40% -1,3% -12% Remuneração do trabalho por ocupado ,0% 43% Fonte: estimado com base na Pesquisa Nacional por Amostra de Domicílios (PNAD).

13 1. Achievements Determinantes do diferencial da renda per capita dos 20% mais pobres: Área Total Determinantes Brasil 2001 Brasil 2015 Diferencial Contribuição Renda per capita ,4% 100% Porcentagem de adultos 54% 63% 1,0% 14% Renda nào derivada do trabalho por adulto ,3% 39% Taxa de ocupação (%) 52% 44% -1,2% -12% Remuneração do trabalho por ocupado ,5% 60% Fonte: estimado com base na Pesquisa Nacional por Amostra de Domicílios (PNAD).

14 1. Achievements Determinantes do diferencial da renda per capita dos 40% mais pobres: Área Total Determinantes Brasil 2001 Brasil 2015 Diferencial Contribuição Renda per capita ,9% 100% Porcentagem de adultos 60% 68% 0,9% 15% Renda nào derivada do trabalho por adulto ,2% 34% Taxa de ocupação (%) 54% 48% -0,9% -11% Remuneração do trabalho por ocupado ,1% 62% Fonte: estimado com base na Pesquisa Nacional por Amostra de Domicílios (PNAD).

15 1. Achievements Determinantes do diferencial da renda per capita: Área Total Determinantes Brasil 2001 Brasil 2015 Diferencial Contribuição Renda per capita ,4% 100% Porcentagem de adultos 71% 79% 0,7% 27% Renda nào derivada do trabalho por adulto ,4% 24% Taxa de ocupação (%) 60% 58% -0,2% -7% Remuneração do trabalho por ocupado ,7% 56% Fonte: estimado com base na Pesquisa Nacional por Amostra de Domicílios (PNAD).

16 2 rate of poverty reduction It is possible to sustain this

17 2. It is possible to sustain this rate of poverty reduction Income Inequality in High and Middle Income Countries: 2012 Brazil Mexico Turkey United States Israel United Kingdom Greece Portugal Estonia Spain New Zealand Italy Australia Korea France Ireland Luxembourg Poland Hungary Germany Switzerland Netherlands Austria Sweden Belgium Finland Iceland Czech Republic Norway Slovenia Slovak Republic Denmark Inequality remains very high 0,20 0,22 0,24 0,26 0,28 0,30 0,32 0,34 0,36 0,38 0,40 0,42 0,44 0,46 0,48 0,50 0,52 0,54 Gini Coefficient

18 Percentage porcentagem of da total renda income total (%) (%) 2. It is possible to sustain this rate of poverty reduction 18 Evolution of the percentage of the total income going to the Evolução da porcentagem da renda das famílias apropriada pelos poorest 40% e 40% 50% and mais 50% pobres in no Brazil Brasil 16 Bottom 50% 50% mais pobre Bottom 40% 40% mais pobre

19 percentage of GDP 2. It is possible to sustain this rate of poverty reduction 20,0 Evolution of the Brazilian Primary Federal Expenditures as a Percentage of GDP: ,5 19,0 18,5 18,0 Federal Primary Expenditures are increasing 0,4 percentage points per year 17,5 17,0 16,5 16,0 15,5 Severe Fiscal Imbalance 15,

20 Total government expenditure as percentage of GDP Taxa de crescimento anual (%) 2. It is possible to sustain this rate of poverty reduction Distribuição Distribution dos of países countries de acordo according com o to gasto total governaental government expenditure como porcentagem as a percentage do PIBof GDP % Brasil 72% Percentage porcentagem of de countries países

21 coeficiente Gini coefficient de Gini 2. It is possible to sustain this rate of poverty reduction Evolução do grau de desigualdade salarial entre os Evolution of the wage inequality among employees in the empregados públicos (estatutários) e os empregados com public and private sectors carteira no setor privado: Coeficiente de Gini ,50 0,49 0,48 0,47 Employees Funcionários in the 0,46 públicos estatutários Public Sector 0,45 0,44 0,43 0,42 0,41 0,40 Employees Empregadosin com the 0,39 carteira Private no setor Sector privado 0,38 0,37 0,36 0,

22 3 Required growth and inequality reduction

23 poverty level (%) 3. Required growth and inequality reduction 20 Impact of balanced growth on poverty: Brazil, Balanced growth (%)

24 3. Required growth and inequality reduction Determinantes do diferencial da renda per capita: Área Total 17 years Determinantes Brasil 2001 Brasil 2015 Diferencial Contribuição Renda per capita ,4% 100% Porcentagem de adultos 71% 79% 0,7% 27% Renda nào derivada do trabalho por adulto ,4% 24% Taxa de ocupação (%) 60% 58% -0,2% -7% Remuneração do trabalho por ocupado ,7% 56% Fonte: estimado com base na Pesquisa Nacional por Amostra de Domicílios (PNAD).

25 poverty level (%) 3. Required growth and inequality reduction 20% Impact on the level of poverty of increasing the level of factors determining per capita income 18% 16% nonlabor income 14% 12% labor income 10% 8% 6% proportion of adults 4% 2% 0% 0% 20% 40% 60% growth in factors determining per capita income

26 poverty level (%) 3. Required growth and inequality reduction Inpact of inequality reduction on poverty: Brazil, reduction in inequality (%)

27 inequality reduction (%) 3. Required growth and inequality reduction Iso-poverty: combinations of growth and inequality reductions leading to a reduction in poverty to one-half growth rate (%)

28 4 Better Targeting

29 Exclusion Error (% of total program expenditures targeted using reported income) 4. Better Targeting 50% 45% 40% 35% Inclusion and Exclusion Errors Associated with the Current "Bolsa Família" Program Targeting Mechanisms 34% Possibilities using an income predictor Reported Income Bolsa Família Targeting System based on reported income has very serious flaws 100% 30% 25% 86% 97% Fixed value for all current beneficiaries 20% 15% 79% 10% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 110% 120% 130% 140% 150% Inclusion Error (% of total programa expenditures targeted using reported income)

30 Percentage of the population below the extreme poverty line porcentagem da população abaixo da linha de pobreza (%) 4. Better Targeting 35 Age Profile of the Extreme Poverty Rate Evolução da porcentagem da população abaixo da linha de pobreza por faixa etária: Brasil, x 15 Mean Média 10 6x Age

31 Porcentagem percentage de of crianças children de up até to 3 anos 3 years em creche old 4. Better Targeting 60 Access to Daycare Centers (children up to 3 years old) by Evolução da taxa de frequência a creche pública para crianças de 0 a 3 anos, tenths segundo of the os décimos income da distribution: distribuição de Brazil, renda: Brasil, Private Public 5 0 Primeiro First Segundo Second Terceiro Third Fourth Quarto Quinto Fifth Sexto Sixth Seventh Sétimo Eighth Oitavo Ninth Nono Décimo Tenth Fonte: Estimativas produzidas a partir da Pesquisa Nacional por Amostra de Domicílios (PNAD).

32 porcentagem de crianças de até 3 anos de idade que percentage of children up to 3 years old frequentam creches (%) 4. Better Targeting 50 Evolução da porcentagem de crianças de até 3 anos de idade tenths frequentando of the income Creches: distribution: Brazil, Evolution of the access to daycare centers (children up to 3 years old) by p.p. 10% mais ricos % mais pobres 10 7 p.p

33 5 Balanced growth of earnings and productivity

34 Crescimento acumulado desde 2001 Accumulated growth since Balanced growth of earnings and productivity Produ Labor vidade Productivity do Trabalho and vs. Real Renda Labor do Income Trabalho Base: (2001=100) (séries reais) Real Labor Income Remuneração média do trabalho p. p PIB Labor por Productivity trabalhador Nota: Renda deflacionada com INPC; PIB com deflator implícito do PIB. Fonte: Renda, Pesquisa Nacional por Amostra de Domicílios (PNAD/IBGE); PIB, Sistema de Contas Nacionais (SCN/IBGE).

35 Remuneração Labor Income do Trabalho (1996=100) (1996=100) 5. Balanced growth of earnings and productivity Growth in Labor Productivity and Real Labor Income: Crescimento da Remuneração do Trabalho vs Crescimento da Produ1996 vidade to do 2003 Trabalho (1996 a 2003) Alignment or misalignment? Labor Productivity (1996=100) Produ vidade do Trabalho (1996=100) Nota: Produtividade definida como PIB real/trabalhadores; Remuneração deflacionada com INPC; Produtividade com deflator implícito do PIB. Fonte: Remuneração, Pesquisa Nacional por Amostra de Domicílios (PNAD/IBGE); Produtividade, Sistema de Contas Nacionais (SCN/IBGE).

36 Remuneração Labor Income do Trabalho (1996=100) (1996=100) 5. Balanced growth of earnings and productivity Growth in Labor Productivity and Real Labor Income: Crescimento da Remuneração do Trabalho vs Crescimento da Produ1996 vidade to do 2011 Trabalho (1996 a 2003) Alignment or misalignment? Labor Productivity (1996=100) Produ vidade do Trabalho (1996=100) Nota: Produtividade definida como PIB real/trabalhadores; Remuneração deflacionada com INPC; Produtividade com deflator implícito do PIB. Fonte: Remuneração, Pesquisa Nacional por Amostra de Domicílios (PNAD/IBGE); Produtividade, Sistema de Contas Nacionais (SCN/IBGE).

37 (1996=100) 5. Balanced growth of earnings and productivity 115 The Evolution of Labor Productivity and Real Average Earnings in Brazil: Labor average productivity (GDP per worker) Real average labor earnings Imbalance or Alignment Between Labor Productivity and Labor Earnings?

38 6 Productive Inclusion

39 labor force participation for men aged 25 to 29 years old (%) 6. Productive Inclusion Evolution of the Brazilian labor force participation rate among men aged 25 to 29 years-old, by their educational level: Secondary education to 9 years of schooling (complete primary education) Generating Persistent Poverty? Labor Marker Difficult in Absorbing Very Low-Skilled Youth Functionally illiterate

40 6. Productive Inclusion 75 Evoluton of Turnover Rates among Brazilian Formal Employees: turnover rates (% of the labor force per year) All workers Low wage ( 2MW) workers Excess Turnover

41 Thousands US$ (2005) per worker per year 6. Productive Inclusion 70 The Evolution of the Average Labor Productivity Selected countries: Japan 50 Korea 40 Argentina 30 Chile 20 Brazil 10 China Source: SAE/PR based on the Penn World Tables. Labor productivity as GDP/worker (Real GDP at constant 2005 national prices).

42 Labor Productivity in 2011 (US$ (2005) per year per worker) 6. Productive Inclusion Ratio between labor productivity in 1980 and Korea China Brazil Labor Productivity in 1980 (US$ (2005) per year per worker) Source: SAE/PR based on the Penn World Tables. Labor productivity as GDP/worker (Real GDP at constant 2005 national prices).

43 6. Productive Inclusion Taxa Average anual annual de crescimento growth da rate produtividade in labor productivity: média do trabalho Latin na América America do Sul ( ) Argentina Peru Equador Suriname Venezuela Colômbia Paraguai Bolívia Chile Latin América America do Sul, without Brasil excluído Brazil Brasil Uruguai 0,0 0,5 1,0 1,5 2,0 2,5 3,0 3,5 4,0 4,5 average annual growth rate (%)

44 6. Productive Inclusion Equatorial Guinea Angola Nigeria Ethiopia Chad Rwanda Mozambique Ghana Tanzania Sierra Leone Uganda Zambia Morocco Lesotho Mauritius Sudan Burkina Faso Sao Tome and Principe Cape Verde Congo - Kinshasa Malawi Tunisia Botswana Egypt South Africa Kenya Congo - Brazzaville Djibouti Namibia Mauritania Mali Gambia Senegal Swaziland Niger Cameroon Burundi Guinea-Bissau Guinea Benin Togo Gabon Central African Republic Ivory Coast Comoros Liberia Madagascar Zimbabwe Taxa Average anual annual de crescimento growth da rate produtividade in labor productivity: média do trabalho Africa na África ( ) Brasil África average annual growth rate (%)

45 Connectivity between 7 education and economic activity

46 ganho percentual de remuneração por ano adicional de escolaridade (%) Earnings gain due to one additional year of education (%) 7. Connectivity between education and economic activity 12,0 Evolução dos diferencias de remuneração por nível Evolution of the wage differentials by educational level educacional 11,5 11,0 10,5 10,0 9,5 9,0 8,5 8,

47 Average Labor Productivity GDP per worker (Thousand US$ (PPP) 1990) 7. Connectivity between education and economic activity Evolution of schooling in adult population and labor production ( ) In Chile, over the past 30 years, productivity growth has been $ 3,000 per additional year of workforce schooling. Average schooling on adult population (successfully concluded grades)

48 Average Labor Productivity GDP per worker (Thousand US$ (PPP) 1990) 7. Connectivity between education and economic activity Evolution of schooling in adult population and labor production ( ) Type I: Countries where productivity grows $ 3,000 per additional year of workforce schooling Average schooling on adult population (successfully concluded grades)

49 Average Labor Productivity GDP per worker (Thousand US$ (PPP) 1990) 7. Connectivity between education and economic activity Evolution of schooling in adult population and labor production ( ) Type II: Countries where productivity grows $ 4,000 per additional year of workforce schooling Average schooling on adult population (successfully concluded grades)

50 Average Labor Productivity GDP per worker (Thousand US$ (PPP) 1990) 7. Connectivity between education and economic activity Evolution of schooling in adult population and labor production ( ) Type III: Countries where productivity grows $ 7,000 per additional year of workforce schooling Average schooling on adult population (successfully concluded grades)

51 Average Labor Productivity GDP per worker (Thousand US$ (PPP) 1990) 7. Connectivity between education and economic activity Evolution of schooling in adult population and labor production ( ) Type 0: Countries where productivity doesn t grow with additional year of workforce schooling Average schooling on adult population (successfully concluded grades)

52 Annual progress of average shooling (years of schooling) 7. Connectivity between education and economic activity Over the past 25 years, Brazil has undergone an unprecedented educational expansion. More than 90% of the countries had a lower progress in this period than Brazil. Annual progress of average schooling of the working age population over the past 25 years by country Fonte: Human Development Data ( Countries distribution

53 Annual growth rate of GDP per capita (GDP/habitant) 7. Connectivity between education and economic activity Annual growth rate of GDP per capita over the past 25 years by country Over the past 25 years, Brazilian growth has been slow. Less than 40% of the countries had lower economic growth in that period than Brazil. Fonte: Human Development Data ( Countries distribution

54 Ration between productivity and schooling progress (%) 7. Connectivity between education and economic activity In Brazil, growth in schooling has not been accompanied by significant growth in labor productivity. More than 2/3 of the countries have translated schooling into productivity better than Brazil. Ratio between productivity and schooling progress over the past 25 years by country Fonte: Human Development Data ( Countries distribution

55 Annual growth rate of GDP per capita (GDP/habitant) 7. Connectivity between education and economic activity If Brazil had the same capacity to translate education into productivity as either Turkey or Korea, Brazilian economic growth would have been two to three times faster than it was over the last 25 years. Annual growth rate of GDP per capita over the past 25 years by country Fonte: Human Development Data ( Countries distribution

56 8 Ageing

57 Distribuição da população (%) 8. Ageing Evolution of the percentage of old-age population: Brazil, At least 60 years old At least 70 years old Source: SAE/PR based on population records and projections from IBGE

58 Distribuição da população (%) 8. Ageing Evolution of the percentage of old-age population: Brazil, At least 60 years old At least 70 years old Source: SAE/PR based on population records and projections from IBGE

59 percentage of the population (%) 8. Ageing Evolution of the Distribution of the Brazilian Population by Age Groups: 1900 to 2060 Between 15 and 59 years old Less than 15 or at least 60 years old Under 15 years old At least 60 years old Source: SAE/PR based on population records and projections from IBGE

60 8. Ageing Number of years for population 65+ to increase from 7% to 14% 21 years Brazil is aging almost six times faster than did France 115 years Source: Growing old in an older Brazil : implications of population aging on growth, poverty, public finance and service delivery / Michele Gragnolati, et al. Washington D.C.: The World Bank, p. 12.

61 8. Ageing Ratio between per capita public expenditure with the elderly and the youth: 2010 ratio

62 Percentage of the population below the extreme poverty line porcentagem da população abaixo da linha de pobreza (%) 8. Ageing 35 Evolução da porcentagem da população abaixo da linha de Age Profile pobreza of por the faixa Extreme etária: Brasil, Poverty 2014 Rate x 15 Mean Média 10 6x Age

63 9 Discrimination

64 9. Discrimination Evolution of the percentage of blacks 30 to 34 years old 60% 55% 50% 45% 40% Total 19 p.p 35% 30% 25% 20% 26 p.p 26 p.p 15% 10% University 5% 0%

65 9. Discrimination Evolution of the percentage of blacks 30 to 34 years old 60% 55% 50% 45% 40% Total 19 p.p 35% 30% 26 p.p 26 p.p 14 p.p 25% 20% 15% 10% University 4 p.p Graduate 5% 0%

66 porcentagem Percentage da população of blacks negra no grupo 9. Discrimination Evolução da Representatividade da População Negra na Evolution População of the Total percentage e entre os Dentistas of blacks Total População population Total p.p p.p Dentistas

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