Young people are left out of the job market – 05/18/2023 – Market

The participation rate in the labor market in Brazil is below the pre-pandemic level in the five age groups surveyed by the IBGE (Brazilian Institute of Geography and Statistics).

This difference in relation to the pre-crisis is greater among young people, according to data released by the institute this Thursday (18).

The participation rate measures the proportion of people aged 14 and over who are included in the labor force as employed (with some type of work) or unemployed (looking for a job).

Depending on the economic context, it can function as a kind of market attractiveness thermometer.

In the first quarter of 2023, the participation rate was estimated at 61.6% overall in Brazil. Thus, it was still 1.8 percentage points below the same period in 2019 (63.4%), before the pandemic.

Among the youngest, aged 14 to 17, the participation rate was 17.2% in the first quarter of 2023. With the result, it was still 2.8 percentage points below the same interval in 2019 (20%).

This difference of 2.8 percentage points is the highest recorded among the five strata of the population with data released by the IBGE. The numbers are part of the Continuous National Household Sample Survey (PNAD).

Experts say that young people often face more difficulties entering the job market due to factors such as lack of experience.

Alessandra Brito, an analyst for the IBGE survey, indicated that the offer of unattractive job vacancies may have kept Brazilians aged 14 to 17 from the market.

Given the situation, a portion may be favoring studies at the moment, which in theory would be “good news”, pointed out the researcher. The reflection in labor statistics is the participation rate farther from the pre-pandemic.

“We observe some researchers talking about it. Given that the income for this range is lower, and the opportunities are not so good, people are staying longer in school,” said Brito in an interview with journalists this Thursday.

For economist Daniel Duque, from FGV Ibre (Brazilian Institute of Economics of the Getulio Vargas Foundation), the data reflect the impacts of the expansion of Auxílio Brasil in the government of Jair Bolsonaro (PL) and Bolsa Família in the management of Luiz Inácio Lula da Silva (PT ).

In the researcher’s evaluation, young people stopped working or looking for a job after their families were covered by income transfers. Part would have focused on studies, and another would not, according to him.

According to the IBGE, among young people aged 18 to 24, the participation rate was 68.3% from January to March 2023. The mark corresponds to 1.5 percentage points less than in the same period of 2019 (69.8%).

In the 25 to 39 age group, the participation rate is higher, estimated at 81.3% in the first quarter of 2023. The indicator, however, was still 1.2 percentage points below the same pre-crisis period (82 .5%).

Duque foresees a similar scenario for the coming months, with a lower participation than in 2019, especially among younger people.

The possible impact of Bolsa Família payments, with additional payments this year, and the probable slowdown in the labor market, which would discourage the search for vacancies, weigh in this economist’s projection.

The participation rate is also below the pre-pandemic level among the older layers of the population surveyed by the IBGE. The difference, however, appears on a smaller scale.

In the 40 to 59 age group, the participation rate was 73.2% in the first quarter of 2023. Thus, it was 0.7 percentage points below the same interval of 2019 (73.9%).

Among Brazilians aged 60 or over, the indicator reached 23.2% from January to March this year. The difference is 0.6 percentage points compared to the same quarter of 2019 (23.8%).

With fewer people looking for work, the unemployment data is less pressured. It’s just that, for a person to be considered unemployed in official statistics, he needs to be looking for vacancies.