The impacts of the Brazilian Labour Reform on employment, output, and labour productivity

Abstract

This paper discusses the role played by the recent Brazilian Labour Reform (BLR) in conditioning the level and the rate of growth of employment, value added and productivity in the Brazilian economy from 2017. Our main findings are that after BLR, the share of informal employment, value added and productivity increased, as well as those shares in low productivity sectors. Furthermore, we show that the employment created in low-productivity sectors (formal and informal) were moved to high-productivity sectors in the years after the implementation of the 2017 labour reform, the aggregate levels of value added and productivity would have been much higher than otherwise.