Federative Republic of Brazil - Social Insurance and Labor Supply : Assessing Incentives and Redistribution

[摘要] This technical report analyzes thepotential effects of the pensions and income protectionsystems on labor supply decisions and through this channelthe coverage and cost of the programs. The report addressesfive policy questions:(i) how is the pension systeminfluencing decisions regarding entry into the labor market,sector choice (formal/informal), and retirement?(ii) Howare current income protection programs affecting turnover;job search efforts and sector choice?; (iii) Are thereinteractions between the two systems that aggravate ormitigate incentive effects?; (iv) What is the role ofredistributive policies in determining observed outcomes?;and (v) Are there policy interventions that could beconsidered to correct incentives, while securing adequateincome protection for different population groups (includingworkers in the informal sector)?The report is organized inthree sections.This first section discusses themotivations for the study and sets the context by brieflydescribing some key stylized facts about the Brazilian labormarket.The focus is on the composition of the labor force,its distribution by occupational categories, unemploymentrisks, and transitions between employment states includingworkers flows between the formal and informal sectors.Thesecond section analyzes the Brazilian social insurancesystem in terms of incentives and redistribution.It startswith an overview of institutional arrangements, programs,and financing mechanisms, which flags the problem of a hightax-wedge.The report then analyzes the rules of thepensions and income protection systems and their potentialeffects on behaviors.The final section proposes a policyframework to guide reforms that could 'correct'incentives by making redistribution more transparent andprogressive.A behavioral life-cycle model estimated forBrazil is used to illustrate how the application of thisframework could affect contribution densities (and thereforethe time spent working in formal sector jobs), retirementages, savings, and programs cost.A companion policy noteon social insurance and labor supply summarizes the mainconclusions and recommendations from the analysis.

[发布日期] 2009-12-30 [发布机构] Washington, DC

[学科分类] 社会科学、人文和艺术（综合）

[关键词] ACTIVE LABOR;ACTIVE LABOR MARKETS;AGGREGATE PRODUCTIVITY;AGGREGATE PRODUCTIVITY GROWTH;ANNUITY