The Regional Impact of National Policies

The Regional Impact of National Policies

The Case of Brazil

Edited by Werner Baer

Brazil is a country of continental proportions whose gross domestic product is unevenly distributed among its various regions. The impact of general domestic economic policies has often been perceived as not being regionally neutral, but as reinforcing the geographic concentration of economic activities. This detailed book examines the regional impact of such general policies as: industrialization, agricultural modernization, privatization, stabilization, science and technology, labor, and foreign direct investment.

Chapter 5: Labor Policies in Brazil

Márcia Azanha Ferraz Dias de Moraes, Fabíola Cristina Ribeiro de Oliveira and Camila Kraide Kretzmann

Subjects: development studies, development economics, economics and finance, development economics, regional economics, urban and regional studies, regional economics


Márcia Azanha Ferraz Dias de Moraes, Fabíola Cristina Ribeiro de Oliveira and Camila Kraide Kretzmann 5.1 INTRODUCTION Despite modernization and rapid economic growth in many developing countries, including Brazil, unemployment remains a serious problem. Technological changes have altered the profile of the workers that a company needs. Employees with higher levels of schooling, and who are more capable of undertaking the required training courses for the improvement of their skills, are favored over low-skilled workers, who are excluded and subsequently find it more difficult to access the work market. This, in turn, leads to inequalities in terms of salaries and wages. Policies in different sectors of the Brazilian economy are expected to diminish the problem. According to Moura and Marinho (2002), labor and employment policies can be split into two groups, namely, passive and active. Passive policies seek to reduce the number of people unemployed. This can be done either by workers retiring sooner or by delaying the entry of young people into the job market and encouraging them to stay longer at school. This type of policy has not been widely used in Brazil, given the country’s fiscal situation. Active policies seek to increase the actual number of jobs. This can be done by using incentives (creating public sector jobs; subsidizing employment for young people or the unemployed; supplying credit and support for small businesses; incentives for sectors that make intense use of labor), or by training and qualifying workers and intermediating between companies and job seekers....

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