| Hello, *|NOME|* In the Letter of May 30 (reread here), we deal with the intergenerational dependence on income transfers that affects a substantial portion of poor families. In this letter, we will deal with the other side of the story: emancipation and productive inclusion. It is known, based on IMDS analyses, that the majority of children dependent on the Bolsa Família Program in 2005 had left CadÚnico (64%) by 2019. More importantly, 46 percent at some point between 2015 and 2019 were found occupying formal jobs. Their presence in RAIS (formal jobs detailed in the Annual Social Information Report) points to the social ascension of a group that was quite vulnerable in childhood. The five-year horizon of observation of RAIS, from 2015 to 2019, is not long enough to conclude that the productive insertion in the formal labor market of those children and adolescents of 2005 is definitive. However, almost a third of the former dependent beneficiaries who arrive at RAIS are identified in every year (32.2%), and two thirds are found in three years or more (65.8%). Therefore, for most, the formalization of the working relationship is not a sporadic event. Last weekend, we launched a new set of results (panels of indicators, presentation and text for discussion) on the productive insertion of the first generation of dependents of the Bolsa Família Program, in which we characterized the employment of the 2005 cohort (approximately 5.2 million people), comparing it with formal employees who had never been in families benefiting from the Bolsa Família, in the same age group, between 2015 and 2019 (approximately 13.2 million people). Both groups, in this period, were aged from 21 to 30 years and the analyses compare, between the two groups, the average salary, the occupation, the time in the last job and the size of the company where they last worked. This letter outlines the key findings of this new study. In its edition on Sunday, June 11, the newspaper Folha de São Paulo also highlighted the content of the research (see here). What about the remuneration of former beneficiaries? Of the children of the initial generation who were found at least once in RAIS in the period between 2015 and 2019, the majority (51%) earn between one and 1.5 minimum wages. Only 4.1% earn more than three minimum wages. The analysis becomes even more interesting when comparing the two groups. While 4.1% of former beneficiaries earn more than three minimum wages, for non-beneficiaries this fraction is 13.3%. Even selecting only former beneficiaries and non-beneficiaries with complete high school education, working in the Southeast and who are white males, the difference persists: in the first group only 6% earn three minimum wages or more, while for the second group the fraction is 11.6%. If we consider only white males who have completed higher education in the Southeast, the fraction of former beneficiaries who earn three minimum wages or more is 35%; while among non-beneficiaries it is 57.6%. That is, having been a beneficiary is correlated with earning less in the future in the formal labor market, even after controlling for the characteristics most associated with schooling premium (sex, region, schooling, and skin color). Part of the wage gap is "explained" by differences in the occupational structure of the two groups in the labor market. For example, former beneficiaries and non-beneficiaries with a complete higher education "choose" different careers in public administration. Among former beneficiaries, a career in the military police – especially corporals and soldiers – is among the 10 preferred occupations. No longer non-beneficiaries with the same level of education "prefer" to be officers of the armed forces (this is among the 10 most frequently sought careers in this group). Elementary school teachers represent 35% of the population of former beneficiaries with higher education employed in the public administration, while only a little more than half (19%) in the group of non-beneficiaries. We divided the list of RAIS occupations into 10 occupational groups, numbered from 1 (requiring less qualification) to 10 (requiring greater cognitive skills), thus identified according to the salary and average education of the occupation. We found a strong positive association between not having been a beneficiary and higher occupational rankings: for all occupations with quality greater than 4, the probability of a non-beneficiary being occupied is higher than that of former beneficiaries. The opposite is true for all quality 4 or less occupations.
Our results indicate that having been a child in a family dependent on Bolsa Família affects the prognoses of success in the labor market. It is less clear why this occurs, although it is possible to list some hypotheses. First, it is very likely that very poor families have much smaller stocks of human, cultural, and social capital than non-poor ones. All of these dimensions of capital are transferred to children from a very early age, in a variety of ways, and continue to exert a huge influence on the entire future life cycle. In particular, with regard to social capital, it seems plausible that poorer children do not have access to a network of contacts that would enable greater social mobility – and it is known that access to some professional positions is often mediated by indications from acquaintances. Second, and touching on social capital, professional aspirations depend on benchmarks for success, and these are determined by the network of interactions available during childhood and youth. It's possible that poorer children had successful references who worked in lower-status occupations, which could have a big influence on their own choices for similar occupations—even when they could hold higher-paying jobs. Finally, poor children tend to study in poorer quality schools – it is known that the Brazilian educational system is highly segregated in terms of income, and, on average, public schools are worse than private ones. This means that, despite having the same "level" of education, former beneficiaries would have less culture and knowledge, which manifests itself in the labor market in the form of occupations with lower status and lower wages. The material now available on the Imds website presents a wide range of information to be savored. Happy reading and see you next "IMDS Letter"! Paulo Tafner CEO |
