IDEAS home Printed from https://ideas.repec.org/a/fgv/epgrbe/v79y2025i1a91348.html
   My bibliography  Save this article

A Note on the Impacts of Fiscal Incentives on the Labor Market in Northeast Brazil

Author

Listed:
  • Carneiro, Diego
  • Costa, Edward
  • Irffi, Guilherme
  • Veloso, Pedro
  • Braz , Marleton
  • Dias, Thyena Karen
  • Andrade, Vanessa

Abstract

Regional inequality has long been a historical issue in Brazil. Among the various strategies employed to mitigate it, the use of fiscal incentives to encourage companies to establish themselves in less developed regions stands out. Despite being extensively utilized, evidence regarding the effectiveness of such incentives is not unanimous. Therefore, this study aims to evaluate the effect of a significant federal fiscal incentive, a 75% reduction in Corporate Income Tax (IRPJ), on the labor market in the Northeast Region. To do so, an exclusive database was employed, allowing the identification of companies that received the incentive since 2006. The staggered differences-in-differences method was used, comparing companies that received the incentive with those that did not. The results showed that the policy increased formal job positions in beneficiary companies by 9.82%. This suggests that the policy was successful in achieving its objective of contributing to the development of the region.

Suggested Citation

  • Carneiro, Diego & Costa, Edward & Irffi, Guilherme & Veloso, Pedro & Braz , Marleton & Dias, Thyena Karen & Andrade, Vanessa, 2025. "A Note on the Impacts of Fiscal Incentives on the Labor Market in Northeast Brazil," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 79(1), July.
    • Handle: RePEc:fgv:epgrbe:v:79:y:2025:i:1:a:91348
    as

    Download full text from publisher

    File URL: https://periodicos.fgv.br/rbe/article/view/91348
    Download Restriction: no
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fgv:epgrbe:v:79:y:2025:i:1:a:91348. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Núcleo de Computação da FGV EPGE (email available below). General contact details of provider: https://edirc.repec.org/data/epgvfbr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.