Brazil’s Paradox in the new millennium: from the euphoria of a new growth cycle to the “production” of the pension deficit

ABSTRACT  This study investigates the financing capacity of social security in Brazil in the early 21st century, considering the sociodemographic changes that affected the workforce during this period. We analyze the transformations that took place in the Brazilian labor market between 2000 and 2015 based on sample data from the IBGE and financial data from the INSS between 2005 and 2016 to understand the financing of social security. We found that although the country has experienced a new cycle of economic growth and improvements in labor indicators, there has been weak performance in industry, as well as an increase in self-employed workers and low-productivity jobs. These improvements have not resulted in sufficient revenue to cover rising social security spending, as evidenced by persistent negative balances over the years. This highlights the need to look for other sources of funding, as provided for in the Constitution. There is also evidence of an accumulation of political devices and subterfuges that culminated in the production of the social security deficit in 2016.

KEYWORDS:
Labor market; Social security; Social security deficits