Decent work and the informal sector in Brazil

Brazil has a substantial share – about 60% by some measures - of its employees working without labor registry and 62% of its private sector workers not contributing to social security. Informality is important because its job precaurioness, social desprotection consequences, and it is also very correlated with poverty and other social welfare concepts measured at a family level. 58% of the country population that is found below the indigent line live in families headed by informal workers. The complexity of the informal sector is derived from the multiple relevant dimensions of jobs quality. The basis used for guiding policy interventions depends on which effect of informality one is interested such: as lowering job precaurioness, increasing occupational risks, increasing the degree of protection against adverse shocks, allowing that good oportunities to be taken by the credit provision, improving informal workers families living conditions, implementing afirmative actions, reducing tax evasion etc. This report gauges various aspects of the informal sector activities in Brazil over the last decades. Our artistic constraint are the available sources of information. The final purpose is to help the design of policies aimed to assist those that hold “indecent” jobs

Pure strategy equilibria of multidimensional and non-monotonic auctions

We give necessary and sufficient conditions for the existence of symmetric equilibrium without ties in interdependent values auctions, with multidimensional independent types and no monotonic assumptions. In this case, non-monotonic equilibria might happen. When the necessary and sufficient conditions are not satisfied, there are ties with positive probability. In such case, we are still able to prove the existence of pure strategy equilibrium with an all-pay auction tie-breaking rule. As a direct implication of these results, we obtain a generalization of the Revenue Equivalence Theorem. From the robustness of equilibrium existence for all-pay auctions in multidimensional setting, an interpretation of our results can give a new justification to the use of tournaments in practice.

Integrability and the demand for monetary assets: an alternative approach to an old problem

This note provides necessary and su¢cient conditions for some speci…c multidimensional consumer’s surplus welfare measures to be well posed (path independent). We motivate the problem by investigating partial-equilibrium measures of the welfare costs of in‡ation. The results can also be used for checking path independence of alternative de…nitions of Divisia indexes of monetary services. Consumer theory classically approaches the integrability problem by considering compensated demands, homothetic preferences or quasi-linear utility functions. Here, instead, we consider demands of monetary assets generated from a shopping-time perspective. Paralleling the above mentioned procedure, of …nding special classes of utility functions that satisfy the integrability conditions, we try to infer what particular properties of the transacting technology could assure path independence of multidimensional welfare measures. We show that the integrability conditions are satis…ed if and only if the transacting technology is blockwise weakly separable. We use two examples to clarify the point.

The forward and the equity premium puzzles: two symptoms of the same illness?

The Forward Premium Puzzle (FPP) is how the empirical observation of a negative relation between future changes in the spot rates and the forward premium is known. Modeling this forward bias as a risk premium and under weak assumptions on the behavior of the pricing kernel, we characterize the potential bias that is present in the regressions where the FPP is observed and we identify the necessary and sufficient conditions that the pricing kernel has to satisfy to account for the predictability of exchange rate movements. Next, we estimate the pricing kernel applying two methods: i) one, du.e to Araújo et aI. (2005), that exploits the fact that the pricing kernel is a serial correlation common feature of asset prices, and ii) a traditional principal component analysis used as a procedure 1;0 generate a statistical factor modeI. Then, using on the sample and out of the sample exercises, we are able to show that the same kernel that explains the Equity Premi um Puzzle (EPP) accounts for the FPP in all our data sets. This suggests that the quest for an economic mo deI that generates a pricing kernel which solves the EPP may double its prize by simultaneously accounting for the FPP.

O novo federalismo social e o Rio: desenho de programas complementares de transferência de renda condicionada

Brazilian public policy entered in the so-called new social federalism through its conditional cash transfers. States and municipalities can operate together through the nationwide platform of the Bolsa Familia Program (BFP), complementing federal actions with local innovations. The state and the city of Rio de Janeiro have created programs named, respectively, Renda Melhor (RM) and Família Carioca (FC). These programs make use of the operational structure of the BFP, which facilitates locating beneficiaries, issuing cards, synchronizing payment dates and access passwords and introducing new conditionalities. The payment system of the two programs complements the estimated permanent household income up to the poverty line established, giving more to those who have less. Similar income complementation system was subsequently adopted in the BFP and the Chilean Ingreso Ético Familiar, which also follow the principle of estimation of income used in the FC and in the RM. Instead of using the declared income, the value of the Rio cash transfers are set using the extensive collection of information obtained from the Single Registry of Social Programs (Cadastro Único): physical configuration of housing, access to public services, education and work conditions for all family members, presence of vulnerable groups, disabilities, pregnant or lactating women, children and benefits from other official transfers such as the BFP. With this multitude of assets and limitations, the permanent income of each individual is estimated. The basic benefit is defined by the poverty gap and priority is given to the poorest. These subnational programs use international benchmarks as a neutral ground between different government levels and mandates. Their poverty line is the highest of the first millennium goal of the United Nations (UN): US$ 2 per person per day adjusted for the cost of living. The other poverty line of the UN, US$ 1.25, was implicitly adopted as the national extreme poverty line in 2011. The exchange of methodologies between federal entities has happened both ways. The FC began with the 575,000 individuals living in the city of Rio de Janeiro who were on the payroll of the BFP. Its system of impact evaluation benefited from bi-monthly standardized examinations. In the educational conditionalities, the two programs reward students' progress, a potential advantage for those who most need to advance. The municipal program requires greater school attendance than that of the BFP and the presence of students’ parents at the bimonthly meetings held on Saturdays. Students must achieve a grade of 8 or improve at least 20% in each exam to receive a bi-monthly premium of R$50. In early childhood, priority is given to the poor children in the program Single Administrative Register (CadÚnico) to enroll in kindergarten, preschools and complementary activities. The state program reaches more than one million people with a payment system similar to the municipal one. Moreover, it innovates in that it transfers awards given to high school students to savings accounts. The prize increases and is paid to the student, who can withdraw up to 30% annually. The total can reach R$3,800 per low-income student. The State and the city rewarded already education professionals according to student performance, now completing the chain of demand incentives on poor students and their parents. Increased performance is higher among beneficiaries and the presence of their guardians at meetings is twice compared to non beneficiaries; The Houston program, also focuses on aligning the incentives to teachers, parents and students. In general, the plan is to explore strategic complementarities, where the whole is greater than the sum of its parts. The objective is to stimulate, through targets and incentives, synergies between social actors (teachers, parents, students), between areas (education, assistance, work) and different levels of government. The cited programs sum their efforts and divide labor so as to multiply interactions and make a difference in the lives of the poor.

Impact assessment and quality analysis of corporate social responsability (CSR) programs of mining companies and their contribution to sustainable development in the communities they operate: case study Tenke Fungurume Mining SA in the Democratic Republic of Congo (DRC)

Purpose – This case study presents an impact assessment of Corporate Social Responsibility (CSR) programs of the TFM Company in order to understand how they contribute to the sustainable development of communities in areas in which they operate. Design/Methodology/Approach - Data for this study was collected using qualitative data methods that included semi-structured interviews and Focus Group Discussions most of them audio and video recorded. Documentary analysis and a field visit were also undertaken for the purpose of quality analysis of the CSR programs on the terrain. Data collected was analyzed using the Seven Questions to sustainability (7Qs) framework, an evaluation tool developed by the Mining, Minerals and Sustainable Development (MMSD) North America chapter. Content analysis method was on the other hand used to examine the interviews and FGDs of the study participants. Findings - Results shows that CSR programs of TFM SA do contribute to community development, as there have been notable changes in the communities’ living conditions. But whether they have contributed to sustainable development is not yet the case as programs that enhance the capacity of communities and other stakeholders to support these projects development beyond the implementation stage and the mines operation lifetime need to be considered and implemented. Originality/Value – In DRC, there is paucity of information of research studies that focus on impact assessment of CSR programs in general and specifically those of mining companies and their contribution to sustainable development of local communities. Many of the available studies cover issues of minerals and conflict or conflict minerals as mostly referred to. This study addressees this gap.

Consumption of luxury goods in Brazil: purchasing motives and values of Brazilian consumers and implications for marketing

Aiming at success in the currently challenging Brazilian market, luxury firms must consider a number of factors. Not only the adaptation to certain economic and political conditions but also the understanding of Brazilian luxury consumers’ characteristics as well as their value perceptions towards luxury are crucial in order to create an effective marketing strategy. This study investigated the value perceptions and purchasing motives of 428 Brazilian consumers. Brazilians purchase luxury goods in order to conspicuously put them on show to certain social reference group or to the general public. Thus, they display their wealth, income and social status. Social groups therefore play a distinct role in the purchasing decision process. Moreover, Brazilians are found to be hedonic consumers, seeking pleasurable moments and the reduction of stress when consuming luxury products. In addition to that, they use luxurious products to express their own personality. Brazilians hence place a much higher importance on self-expressive, emotional product benefits rather than on rational, functional product benefits. Marketers of luxury goods are advised to make use of this knowledge in order to adequately address consumers’ needs, wants and beliefs. The study focuses on consumers living in Rio de Janeiro and does not take into account different value perceptions on different luxury product categories. Therefore, suggestions for further research include replicating the study in different Brazilian regions and probing for differences among product categories.