Labor Markets and the Business Cycle in Brazil: Differential Impacts across Demographic Groups

Advisor: Gustavo Gonzaga

In this paper we explore the effects of business cycle on labor market outcomes. We examine how the business cycles affect the occupation and unemployment rates across people of different age, gender, race and education. We use individual level data from PME, published by IBGE, to estimate a panel data model that calculates the sensitivity of each group to the business cycle in main metropolitan regions in Brazil. Our study shows that the impacts of cycles are not uniform across demographic groups and who are most sensible to business cycles are women, white workers, youth and low education workers. These groups registered the greatest reaction in their unemployment and employment rates during recessions and booms, respectively, compared to their pairs. In addition, we show that the differences in the cyclicality across demographic groups can be explained by differences in their exposure to industry occupation employment

MP 2