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Rightsizing Brazil’s Public-Sector Wage Bill

Author

Listed:
  • Ms. Izabela Karpowicz
  • Mauricio Soto

Abstract

Brazil’s public-sector wage bill is comparatively high. It grows inertially and competes with other spending. Rightsizing the wage bill could stimulate administrative efficiency and bring more equity into a system where public employees earn more than private in comparable professions. Most importantly, however, a reform is necessary to comply with the Federal government expenditure ceiling and the subnational fiscal responsibility rules. A reform should thus encompass all government levels, and all careers, and should aim to achieve a real decrease in salaries and lower employment. In the medium term, a review of the compensation structure should rationalize the multitude if wage grids, merge allowances into the base wage, and align public sector compensation to private wages in low-skilled professions.

Suggested Citation

  • Ms. Izabela Karpowicz & Mauricio Soto, 2018. "Rightsizing Brazil’s Public-Sector Wage Bill," IMF Working Papers 2018/225, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2018/225
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    References listed on IDEAS

    as
    1. International Monetary Fund, 2016. "Brazil: Selected Issues," IMF Staff Country Reports 2016/349, International Monetary Fund.
    2. Carlos Góes & Ms. Izabela Karpowicz, 2017. "Inequality in Brazil: A Regional Perspective," IMF Working Papers 2017/225, International Monetary Fund.
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    Cited by:

    1. Baez, Maria Josefina & Brassiolo, Pablo & Estrada, Ricardo & Fajardo, Gustavo, 2022. "Going subnational: Wage differentials across levels of government in Brazil, Mexico, and Uruguay," World Development, Elsevier, vol. 160(C).

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