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Social Security Reform in Brazil: Achievements and Remaining Challenges

Author

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  • Fabio Giambiagi
  • Luiz de Mello

Abstract

This paper reviews the main elements of social security reform in Brazil since 1998 and discusses areas where further policy action is yet to be taken to ensure the sustainability of the social-security system over time. Outlays on pensions paid to private-sector workers have risen as a result of population ageing and the increase in the value of the minimum wage in real terms, to which the minimum pension is linked. Some features of existing social protection programmes, including means-tested old-age and disability-related benefits, reduce the incentives facing workers to seek social security coverage. At the same time, an expansion of the base of contributions to social security has been constrained by widespread labour informality. Further reform will therefore need to focus on options for containing the rise in social security spending while tackling labour informality so as to broaden the base of contributions. Réforme du système de retraite au Brésil : Réussites et défis Ce document analyse les réformes du système de retraite brésilien depuis 1998 et propose des éléments d'une réforme complémentaire qui pourraient être mise en place pour assurer la soutenabilité du système de retraite dans la durée. Les dépenses publiques des pensions accordées aux travailleurs retraités du secteur privé ont augmenté dû au vieillissement de la population et à l'accroissement de la valeur du salaire minimum en termes réels, auquel la pension minimale est indexée. Certains éléments des programmes de protection sociale existants, y compris les transferts de revenu aux personnes âgées et aux invalides, n'incitent pas les travailleurs à être couverts par la sécurité sociale. En même temps, l'informalité très répandue des marchés du travail constitue une contrainte à l'expansion de la recette des cotisations sociales. Par conséquent, des réformes complémentaires devront mettre en oeuvre des dispositifs visant la contention de l'accroissement des dépenses publiques des pensions et à la réduction de l?informalité du travail de façon à augmenter la recette des cotisations sociales.

Suggested Citation

  • Fabio Giambiagi & Luiz de Mello, 2006. "Social Security Reform in Brazil: Achievements and Remaining Challenges," OECD Economics Department Working Papers 534, OECD Publishing.
  • Handle: RePEc:oec:ecoaaa:534-en
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    File URL: http://dx.doi.org/10.1787/353362832738
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Glomm, Gerhard & Jung, Juergen & Tran, Chung, 2009. "Macroeconomic implications of early retirement in the public sector: The case of Brazil," Journal of Economic Dynamics and Control, Elsevier, vol. 33(4), pages 777-797, April.
    2. Jung, Juergen & Tran, Chung, 2012. "The extension of social security coverage in developing countries," Journal of Development Economics, Elsevier, vol. 99(2), pages 439-458.
    3. Gentilini, Ugo & Omamo, Steven Were, 2011. "Social protection 2.0: Exploring issues, evidence and debates in a globalizing world," Food Policy, Elsevier, vol. 36(3), pages 329-340, June.
    4. Luiz de Mello, 2011. "Brazil’s Achievements and Challenges," CESifo Forum, Ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 12(1), pages 3-10, March.
    5. Pedro C Ferreira & Marcelo R Dos Santos & Flavio Cunha, 2010. "The Impact of Social Security Reform on Occupational and Retirement Behavior: A Quantitative Assessment for Brazil," 2010 Meeting Papers 977, Society for Economic Dynamics.
    6. Argesanu, Nicolae Razvan, 2013. "Politici Din Sfera Protectiei Sociale Si Sustenabilitatea Lor In Contextul Constrangerilor Bugetare
      [Policy Of Social Protection Sphere And Their Sustenability In The Context Of Budgetary Constrain
      ," MPRA Paper 47800, University Library of Munich, Germany.

    More about this item

    Keywords

    Brazil; Brésil; protection sociale; réforme du système de retraite; social protection; social security reform;

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions

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