Sustaining Employment and Wage Gains in Brazil

In the past 15 years, employment, labor market participation, and wages have grown significantly in Brazil. Improved labor market outcomes have been the main drivers of reductions in poverty and inequality. Sustaining Employment and Wage Gains in Brazil: A Skills and Jobs Agenda analyzes Brazil's labor markets and identifies the key challenges involved in sustaining job creation, wage growth, and poverty reduction. The work finds that continued progress in employment and labor earnings will depend on the country's ability to achieve a first critical goal: raise labor productivity. Continued improvements in the livelihoods of the poor will depend on achieving a second critical goal: connecting the poor to better, more productive jobs. In light of these goals, the report discusses reforms of program design and implementation in the following policy areas: (a) skills development (including through the flagship training program, PRONATEC); (b) unemployment insurance and other labor market regulations; (c) active labor market programs, including the National Employment System and entrepreneurship support; and (d) productive inclusion programs that, by promoting employability or income-earning opportunities for the poorest segments of the population in new ways, can help connect the poor to better, more productive jobs. The report reviews existing interventions in these four policy areas and proposes an agenda of incremental policy changes that could more effectively support the two critical goals. It also illustrates how other countries have dealt with similar challenges. As the report emphasizes, an essential first step will be to strengthen monitoring and evaluation systems to measure results by tracking programs' effects on labor market outcomes and using that information to inform program expansion. It also describes specific opportunities in each policy area to better coordinate programs with private sector demands and across policies, while also adapting them to improve the results for the urban and rural poor.