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Is the window of opportunity closing for Brazilian youth? Labor market trends and business cycle effects

  • Justesen, Michael
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    Brazilian youth today face enormous difficulties in penetrating the labor market, a situation much different from the one 25 years ago. While females have entered the labor market and increased their employment rate many are unemployed. Youth unemployment reached 19.1 percent in 2002; up from 4.5 percent in 1978. This paper analyzes long-run trends, as well as the impact of business cycles, on Brazilian youth in the labor market. To do this, the paper uses Brazilian household data (PNAD) spanning 1978-2002 and covering 290,000-530,000 individuals per year. Two main findings are presented: first, the labor market situation for youth has deteriorated and did especially so in the 1990s. In particular, labor force participation and employment have been decreasing relatively more for youth than for adults, but also wages decreased and unemployment increased for youth. Second, Brazilian youth were adversely impacted by business cycle fluctuations. During recessions youth lost ground compared to adults in the labor market in terms of labor force participation, employment, and to some extent unemployment. During expansions youth did not catch up on adults; in fact, the gap continued to widen.

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    Paper provided by The World Bank in its series Social Protection Discussion Papers with number 47188.

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    Date of creation: 01 Apr 2008
    Date of revision:
    Handle: RePEc:wbk:hdnspu:47188
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    1. Blom, Andreas & Holm-Nielsen, Lauritz & Verner, Dorte, 2001. "Education, earnings, and inequality in Brazil, 1982-98 - implications for education policy," Policy Research Working Paper Series 2686, The World Bank.
    2. repec:ilo:empstr:2005-02 is not listed on IDEAS
    3. Raaum, Oddbjørn & Røed, Knut, 2003. "Do Business Cycle Conditions at the Time of Labour Market Entry Affect Future Unemployment?," Memorandum 12/2002, Oslo University, Department of Economics.
    4. Niall O'Higgins, 2005. "Trends in the Youth Labour Market in Developing and Transition Countries," Labor and Demography 0507002, EconWPA.
    5. Hoek, Jasper, 2006. "Life Cycle Effects of Job Displacement in Brazil," IZA Discussion Papers 2291, Institute for the Study of Labor (IZA).
    6. Fares, Jean & Montenegro, Claudio E. & Orazem, Peter F., 2006. "How are youth faring in the labor market ? Evidence from around the world," Policy Research Working Paper Series 4071, The World Bank.
    7. Ferreira, Francisco H. G. & Leite, Phillippe G. & Litchfield, Julie A., 2006. "The rise and fall of Brazilian inequality, 1981-2004," Policy Research Working Paper Series 3867, The World Bank.
    8. Justesen, Michael & Verner, Dorte, 2007. "Factors impacting youth development in Haiti," Policy Research Working Paper Series 4110, The World Bank.
    9. Lam, David, 2006. "The demography of youth in developing countries and its economic implications," Policy Research Working Paper Series 4022, The World Bank.
    10. Neri, Marcelo Cortes & Thomas, Mark R., 2000. "Macro Shocks and Microeconomic Instability: an Episodic Analysis of Booms and Recessions," Economics Working Papers (Ensaios Economicos da EPGE) 391, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
    11. Duryea, Suzanne & Lam, David & Levison, Deborah, 2007. "Effects of economic shocks on children's employment and schooling in Brazil," Journal of Development Economics, Elsevier, vol. 84(1), pages 188-214, September.
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