Who Suffers During Recessions in Brazil?

Mar 2019
While the relationship between business cycles and employment is a topic of continuing interest, it has received limited attention in the literature focusing on developing countries. This study adds to the literature as it analyzes the heterogeneous correlations of business cycles with employment, unemployment and participation rate by different age, education, gender and ethnic groups in a developing country setting. Using data from the monthly PME employment surveys between 2002 and 2016 in Brazil, we assess how these labour market measures in specific demographic groups are affected by the business cycles. The results provide evidence of the existence of large heterogeneities among demographic groups. Interestingly, demographic groups’ labour market measures in levels are not necessarily aligned with their sensitivity to economic cycles when controlling for other demographic characteristics. Understanding how levels of labour market measures related to their sensitivity to cycles is crucial to design better policies.