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Em busca de incentivos para atrair o trabalhador autônomo para a Previdência Social [Seeking incentives for self-employed people to join the Brazilian social security system]

Author

Listed:
  • Marcelo Neri

    (EPGE/FGV)

  • Samantha Dart Tamm

    (EPGE/FGV)

  • Flavio Menezes

    (EPGE/FGV)

  • Leandro Kume

    (EPGE/FGV)

Abstract

This paper intends to show that economic incentives can affect the decisions of self-employed people whether to join or not the Brazilian social security system using a Principal-Agent framework. Relaxation of the rules for low income workers to access social security benefits promoted by the Federal Constitution of 1988 provides a laboratory to test such a model. The empirical analysis, however, contradicts the expectations of the theoretical model. There is a general movement of withdrawal from the social security system yet this movement is more pronounced at the richest self-employed group. In theoretical terms, this is explained by a violation of the incentive compatibility constraints. One possible explanation is that the increase in the availability of private pension funds in the market has created competition for the government system.

Suggested Citation

  • Marcelo Neri & Samantha Dart Tamm & Flavio Menezes & Leandro Kume, 2007. "Em busca de incentivos para atrair o trabalhador autônomo para a Previdência Social [Seeking incentives for self-employed people to join the Brazilian social security system]," Nova Economia, Economics Department, Universidade Federal de Minas Gerais (Brazil), vol. 17(3), pages 363-394, September.
  • Handle: RePEc:nov:artigo:v:17:y:2007:i:3:p:363-394
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    More about this item

    Keywords

    social security; informality; self-employed; labor market;

    JEL classification:

    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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