COVID-19 Sends the Bill: Socially Disadvantaged Workers Suffer the Severest Losses in Earnings

Abstract

This work uses a nationally representative household survey conducted by phone during the COVID-19 pandemic to estimate the short-term impacts of lockdown measures on employment and income in Brazil. In May 2020, 18 percent of the employed population (around 15.7 million workers) were temporarily absent from their jobs due to the lockdown policies while 56.6 percent of them were no longer earning an income from work. Similar figures were registered in June 2020. This decrease in employment has generated a fall of 18 percent in the average work income and an increase of 0.014 points in the Gini coefficient. The vulnerable among the population have been hit hardest by the pandemic: the average earnings of the lowest income decile decreased from BRL 389.07 to 0 while for the second-lowest a 70.2 percent reduction has been seen (from BRL 878.08 to BRL 262.06). Thanks to the implementation of the COVID-19 Emergency Aid, the Brazilian government has been able to reduce the losses in income for all social classes. Nevertheless, the average income of the first decile is 5 percent lower than the value pre-pandemic while for the second decile the equivalent figure is 15.2 percent.