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Beyond informal employment: Stagnation and disguised employment in Brazil

Author

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  • Baltar, Carolina Troncoso
  • Dweck, Esther
  • Marcato, Marília Bassetti
  • Krepsky, Camila Unis

Abstract

This study analyses the Brazilian labour market from 2014 to 2019, focusing on the impact of the country's growth pattern on rising informal and self-employment. After a period of economic growth, Brazil faced a recession (2015–2016) and stagnation (2016–2019). Austerity-driven reforms were implemented, weakening policies aimed at stimulating growth, reducing unemployment, and improving formalization. Using structural decomposition analysis within a demand-driven input-output model, the study examines how changes in demand components affected employment by sector, formalization, and occupational status. Key findings reveal that the slow economic recovery, characterized by limited investment and government spending, led to a significant shift from formal to informal employment and self-employment, especially in service sectors. While discussing the diversity hidden within the occupational category of self-employed workers, the research also explores the specific characteristics of this category, providing insights to understand possible disguised employment as part of a structural transformation.

Suggested Citation

  • Baltar, Carolina Troncoso & Dweck, Esther & Marcato, Marília Bassetti & Krepsky, Camila Unis, 2025. "Beyond informal employment: Stagnation and disguised employment in Brazil," Structural Change and Economic Dynamics, Elsevier, vol. 74(C), pages 814-828.
    • Handle: RePEc:eee:streco:v:74:y:2025:i:c:p:814-828
    DOI: 10.1016/j.strueco.2025.06.009
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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