| Hello, *|NOME|* We ended 2024 with an unemployment rate close to 6% – a very low level for the historical series – and with GDP growth of 3.5%. These are results to celebrate. On the other hand, we ended this same year with the dollar above R$ 6.15, the stock market with a drop of more than 10% (almost 30% in dollars) and public debt reaching a dangerous 80% of GDP, with a value above 9 trillion reais. There are, therefore, reasons for celebration and reasons for concern. IMDS begins its series of Letters in 2025 with the theme of the labor market – which has data of great vitality. This year marks half a decade of the COVID-19 pandemic and its devastating shock to labor markets around the world. It is true that the post-pandemic period seems to have returned to normal levels, with occupancy loss rates stabilizing. In Brazil it is no different. The return to normality suggests that, despite the initial shock, the labor market has managed to adjust over time. This recovery has had different distinct impacts when considering diverse sociodemographic groups, especially when we turn to the outcomes of women, individuals with little schooling, informal workers, and non-whites. An IMDS study on occupational dynamics in Brazil, which supported the article "Inequality in the recovery of the labor market", published in Valor Econômico on 12/30/2024, reveals that occupational inequalities persist in Brazil. Using longitudinal data from the Continuous PNAD (PNADC), from 2017 to the first quarter of 2024, the study focuses on occupational dynamics through a dual approach: descriptive analysis and risk analysis. This strategy makes it possible to identify which groups were most affected by the crisis and which characteristics are associated with greater resilience in the occupation, offering a solid basis for the formulation of public policies. The descriptive analysis focused on general patterns, revealing, for example, that before and after the pandemic, the probability of workers in the formal market being unemployed (in subsequent quarters) was about 8%, while in the informal market it reached 22%. During the peak of the pandemic, these rates rose to 14% and 34%, respectively, which shows a particularly severe effect of the global health crisis among informal workers. The risk analysis, in turn, complemented the descriptive analysis, by evaluating the relative effects of different individual and occupational characteristics in relation to the perspective of loss of occupation, controlling for the other variables.
Non-whites had higher risks of job loss than whites. Before the pandemic, non-white workers in informal occupations faced an average probability of loss of 25%, while informal whites recorded 20%. With the arrival of the pandemic, the situation worsened for both groups, with the probability of loss among informal non-whites reaching 35.8% (an increase of 43.2%), while for informal whites the peak was 29.5% (an increase of 47.5%). In the formal market, the probability of dismissal for everyone was much lower, but among non-whites it was consistently higher than that of whites. During the pandemic, for example, the risk of losing one's job was 6.4% higher for mixed races and 4.0% higher for blacks. In the post-pandemic period, the differences remained, although small, being mixed races 4.9% and blacks 3.0% more at risk. Women faced a higher risk of loss of occupation in all periods, both in informal and formal markets. In the pre-pandemic period, the occupational loss rate for informal women was, on average, 28.1%, while among informal men the average rate was around 18.7%. During the pandemic, the probability of losing occupation among informal women reached 41.8%, while for men the value was 27.3%. Young people, between 18 and 29 years of age, had a risk of dismissal that varied between 9.2% in the pre-pandemic and 6.9% in the post-pandemic compared to adults aged 30 to 59 years. And the elderly (60 years and older) had a 36.1% higher risk during the pandemic, remaining 34.7% higher in the post-pandemic. Schooling also markedly influenced the stability of the occupation, with more qualified and formally employed workers presenting greater protection against dismissals, both during and after the crisis: workers with incomplete secondary education or less faced up to 17.0% higher risks of dismissal in the post-pandemic period compared to workers with higher education. Differences in occupational dynamics reveal that the impact of the pandemic on the labor market was largely transitory. However, inequalities between groups remain as deep-seated as ever. Understanding why certain social groups are less than half as likely to remain employed compared to others is essential to debating the construction of a more equitable society. Such disparities highlight structural problems of social mobility, the most visible manifestation of which is the differences in the chances of remaining in the labor market.
If reducing inequalities is a central challenge of our time, it is essential to formulate public policies aimed at the inclusion and protection of the most vulnerable workers. Measures that improve professional skills and encourage formalization in conjunction with improved social protection are essential to reduce disparities and promote a fairer and more inclusive economic recovery. See you in the next "IMDS Letter"! Paulo Tafner CEO | 
