Opinion – Pablo Acosta: Telephone surveys can help to understand the vulnerable population

Despite the devastating effect of the Covid-19 pandemic on the Brazilian economy and labor market in 2020, the poverty indicators recently released by the IBGE showed reductions compared to 2019. This was due to the large and significant income transfers carried out by the program of Emergency Aid in 2020. In fact, both IBGE estimates and World Bank simulations show that, without these transfers, poverty would have increased in that year. According to a recent World Bank report, no other country in the Latin American region implemented this type of support with a similar impact on protecting the vulnerable population in 2020.

We know that in 2021 the temporary Emergency Aid program had to be reduced and ended up being phased out. EA transfers reached a much smaller proportion of the population in 2021 compared to 2020. While transfers in 2020 benefited 68.2 million individuals, in 2021 this coverage dropped to a total of 39.3 million individuals. However, the new Auxílio Brasil, which will have expanded benefits and coverage when compared to Bolsa Família, will mitigate this drop in 2022.

At the same time, the unemployment rate has remained above pre-pandemic levels and many households are losing their purchasing power. The cost of living for families, as measured by the INPC (Broad National Consumer Price Index), has risen more than 9% so far this year. Updated estimates of the impact of these factors on poverty in Brazil will not be available until next year.

However, it is important that policy makers looking to protect poor and vulnerable families get a sense of how Brazilian families are doing in 2021. Recent data collected by the World Bank through a telephone survey conducted in August and September of this year can provide valuable information. According to this survey, the situation of more than four out of ten families is worse than before the pandemic: compared to the period before the pandemic, 43.1% of families had lower total household income at the time of the survey.

Also according to the telephone survey, lower income from work is an important factor behind the drop in total family income in 2021. Almost half of families (46.3%) report lower wage income compared to the period pre-pandemic, mainly because the unemployment rate is even higher than before the pandemic.

Furthermore, the data also suggest that work became more precarious for those who remained employed. The survey reveals a reduction in formal employment and an increase in self-employment at the expense of formal wage employment. While 71.8% of workers said they had jobs with social security contributions before the pandemic, only 64.8% said that at the time of the survey. The proportion of workers who reported working as self-employed increased from 36.5% in the period before the pandemic to 42.8% at the time of the survey – approximately 6 percentage points (pp).

At the same time, data suggest a reduction in the proportion of formal salaried workers by around 5 pp. The survey also shows a reduction in average hours worked from 42.6 hours before the pandemic to 39.2 hours at the time of the survey, and a trend towards employment in smaller companies. At the time of the survey, the proportion of workers employed in companies with fewer than five employees and larger companies was roughly equal, whereas before the pandemic only 41.7% of workers declared they were working in smaller companies.

The combination of lower incomes and higher prices for basic food baskets and other essential items has led many families to find it difficult to pay their bills. Almost 40% of the families said they were unable to meet their basic needs in the reference month of the survey. And although approximately a third (32.5%) of families received Emergency Assistance in 2021, according to the survey, more than half of these families (56.8%) declared that they were unable to meet their basic needs. Almost one in five families (18%) declared that they ran out of food at least once due to lack of money or resources in the month prior to the survey. On the other hand, only 9% of families remember having lived in this situation before the pandemic.

The survey also provides insights into how much people think it would take to cover basic expenses. Respondents reported that, on average, a minimum amount of R$ 811 per month per person would be needed to meet basic needs in the North of the country. Among the families in the Southeast region, the corresponding value was R$1,373. Among chronic vulnerable families (enrolled in Bolsa Família before the pandemic), these differences persist: R$476 and R$884, respectively. These findings point to two facts.

First, with a median per capita income of around R$ 407 in the North region, and R$ 661 in the Southeast region, according to the latest PNADC survey, most families still do not have jobs that allow them to meet their needs. .

Second, households’ purchasing power is not disconnected from where they live, so the same standards should not be applied across the country when assessing levels of well-being. In fact, a recent study on the costs of basic items in Brazil revealed that regional and urban/rural variation in the country can represent approximately 20% of the variation in costs of living among less favored households and, therefore, should be considered when calculate the poverty lines.

Amid the slow recovery of the labor market, the growing precariousness of available jobs and the rising cost of living, including effective social protection policies has become more important than ever. For this, it is important to continue exploring the most current data possible now (which can be done through quick telephone surveys) on the main aspects related to well-being, especially those that can complement the monetary dimension, allowing the identification of main characteristics of the poor and vulnerable. In the future, it will be crucial to incorporate information that reflects Brazil’s minimum livelihood standards as a key component in designing policies that prioritize the country’s poor.

This column was written in collaboration with economists Gabriela Lara Ibarra and Anna Luisa Paffhausen