International Labour Organization: Assessing the Employment Impacts of the Covid-19 Economic Crisis and Recovery Policies in Brazil
Cambridge Econometrics was commissioned by the International Labour Organization to assess the impact of economic fiscal interventions introduced by the Government of Brazil 2021-2022 on net employment.
The aim of the economic fiscal interventions were to support economic recovery from COVID-19 in Brazil, reducing the negative impact on employment.
Using our macroeconomic model E3ME, our labour market analysis experts grouped Brazil’s recovery policies into six fiscal recovery policies archetypes that ranged in green and non-green interventions; from building upgrades and energy efficiency infrastructure investments to targeted recovery cash transfers and healthcare investment.
Key Findings
Comparing both the combined and individual impacts of these six policy archetypes against a Business As Usual scenario where it is assumed none of these policies were intervened to help Brazil’s economy recover from COVID-19, the employment outlook for Brazil 2021-2030 was viewed through economy-wide outcomes, sectoral employment impacts, and a comparison between the impacts of green and ‘conventional’ fiscal recovery policies on jobs and emissions.
Compared to a Business As Usual scenario where none of the recovery policies were implemented, the recovery policies created a combined effect of 145,000 additional jobs.
Whilst the initial policy-induced stimulus saw the strongest employment impact on additional job creation, due to 91% of the policies implemented being consumption boosting policies, there are also relatively permanent gains over the long-run of 79,000 jobs sitting above baseline by 2030.
The increase in employment was especially strong in service sectors in 2021, with an additional 21,000 jobs in retail and tourism, 73,000 jobs in business services, and 22,000 jobs in public services.
Agriculture also gained an additional 21,000 jobs due to the impacts of the policies on demand for food, leading to an increase in food production.
Whilst the recovery policies increase emissions, the additional jobs will produce less emissions than the national average in the short- and long-term.
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Madalina Suta
Head of European & Global Economic & Social Policy