Strengthening Income Stabilization through Social Protection in Emerging and Developing Economies: The Brazilian Experience

By Fernanda Brollo, Gabriel Lara Ibarra, Ricardo Campante Vale

March 8, 2024

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Fernanda Brollo, Gabriel Lara Ibarra, and Ricardo Campante Vale. Strengthening Income Stabilization through Social Protection in Emerging and Developing Economies: The Brazilian Experience, (USA: International Monetary Fund, 2024) accessed December 22, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Social protection programs are crucial for stabilizing household income, especially during crises. Brazil's response to the pandemic, the Auxilio Emergencial (AE) program, demonstrated the value of a resilient social safety net and digital tools. This study assesses AE's effectiveness in income stabilization, poverty reduction, and inequality. Results show that the pre-pandemic social protection system would have only buffered about a quarter of income loss, with unemployment insurance more significant for higher-income households, and social safety net transfers crucial for lower-income households, especially those in informal employment. AE successfully supported lower-income households during the pandemic, but its generosity went beyond the stabilization of income, resulting in large fiscal costs.

Subject: COVID-19, Expenditure, Health, Income, Labor, Labor markets, National accounts, Social assistance spending, Social protection spending

Keywords: AE's effectiveness, Auxilio Emergencial, Auxílio Emergencial beneficiary, Brazil, COVID-19, Global, Household income, Income, Income stabilization, Income Stabilizer, Labor markets, Poverty Reduction, Social assistance spending, Social Protection, Social protection spending, Social Safety Net

Publication Details

Pages:

27
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2024/052
Stock No:

WPIEA2024052
ISBN:

9798400266980
ISSN:

1018-5941

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