The Brazilian agribusiness labor market: measurement, characterization and analysis of income differentials

Castro, Nicole Rennó; Barros, Geraldo Sant’Ana de Camargo; Almeida, Alexandre Nunes; Gilio, Leandro; Morais, Ana Carolina de Paula

doi:10.1590/1806-9479.2020.192298

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ARTICLE • Rev. Econ. Sociol. Rural 58 (1) • 2020 • https://doi.org/10.1590/1806-9479.2020.192298 copy

The Brazilian agribusiness labor market: measurement, characterization and analysis of income differentials

O mercado de trabalho do agronegócio brasileiro: mensuração, caracterização e análise de diferenciais de rendimento

Authorship SCIMAGO INSTITUTIONS RANKINGS

Abstract:

Although the Brazilian agribusiness sector’s relevance to the country has been widely recognized nowadays, to date, no study has been developed to evaluate the level of employment in this sector as a whole for Brazil. Therefore, the first objective of this study is to access the Brazilian agribusiness labor market, and to measure it, analyze its structure and characterize its workers. Agribusiness worker income differentials were also contrasted with income differentials in the aggregated non-agribusiness labor force. The main results from the study are as follows: a) in 2017, 18.2 million individuals, 20.1% of the country’s labor force, worked in the Brazilian agribusiness sector; b) agribusiness workers were predominately unskilled or semi-skilled with a low level of schooling; c) a large proportion of the sector’s labor force were not formally employed; and d) the average income of agribusiness employees was lower than that of individuals in other economic sectors. There is also extreme labor market heterogeneity among agribusiness sector segments – with the primary segment presenting a noticeably dissimilar profile – and a significant income differential associated with different labor market statuses, economic sub-sectors and locations, and with individual characteristics such as level of schooling, skin tone and gender.

Keywords:
agribusiness; earnings regression; labor market; methodological approach

Variable	Description
- Formal education^* * highest level of instruction achieved; :
No_inst	1 for no instruction and 0, otherwise (base category)
Basic_Inc	1 for incomplete basic schooling and 0, otherwise
Basic_Comp	1 for complete basic schooling and 0, otherwise
Second_Inc	1 for incomplete secondary schooling and 0, otherwise
Second_Comp	1 for complete secondary schooling and 0, otherwise
College_Inc	1 for incomplete college education and 0, otherwise
College_Comp	1 for complete college education and 0, otherwise
-Age and gender:
Age	Individual’s age (years)
Age2	Squared individual’s age (years)
Women	1 if is women and 0, otherwise
- Race or skin self-declared
White	1 if is white and 0 otherwise (base category)
Black	1 if is black and 0 otherwise
Yellow	1 if is yellow and 0 otherwise
Brown	1 if is brown and 0 otherwise
Indigene	1 if is indigene and 0 otherwise
Other_race	1 if race was not declared and 0 otherwise
- Employment status controls:
Emp_formal^ both in the private and public sectors and also as domestic workers;	1 for employed with a formal contract and 0, otherwise (base category)
Emp_informal**	1 for employed without a formal contract and 0, otherwise
Employer	1 for employer and 0, otherwise
Self-employed	1 for self-employed and 0, otherwise
Other_status	1 for military/statutory servants/auxiliary family workers and 0, otherwise
- Geographic region controls:
Center-West	1 for the Center-West region and 0, otherwise (base category)
North	1 for the North region and 0, otherwise
Northeast	1 for the Northeast region and 0, otherwise
Southeast	1 for the Southeast region and 0, otherwise
South	1 for the South region and 0, otherwise
- Economic sub-sector controls
econ_set1	1 if Agricultural and forestry activities of section A of the CNAE and 0, otherwise
econ_set2	1 if Livestock, fishing and aquaculture activities of section A of the CNAE and 0, otherwise
econ_set3	1 if Extractive industry (Section B) and 0, otherwise
econ_set4	1 if Production of food, beverages and tobacco of section C of the CNAE and 0, otherwise
econ_set5	1 if Production of textiles, clothing and leather and footwear of section C of the CNAE and 0, otherwise
econ_set6	1 if Production of wood products, pulp, paper and paper products of section C of the CNAE and 0, otherwise
econ_set7	(base-category) 1 if section C of the CNAE except industries included in dset4, dset5 and dset6, and 0, otherwise
econ_set8	1 if electricity, gas, water and sewage (CNAE sections D and E) and 0, otherwise
econ_set9	1 if construction (CNAE section F) and 0, otherwise
econ_set10	1 if trade, transport and accommodation and food services (CNAE sections G, H and I) and 0, otherwise
econ_set11	1 if information, financial services and real estate activities (CNAE sections J, K and L) and 0, otherwise
econ_set12	1 if professional, scientific and technical activities (CNAE section M) and 0, otherwise
econ_set13^* ***** includes administrative activities; public administration, defense and social security; education; human health and social services; arts, culture, sports and recreation; other service activities; domestic services; international organizations and other extraterritorial institutions; and activities not defined.	1 if CNAE sections N, O, P, Q, R, S, T, U and V, and 0, otherwise
- Time controls:
Jan-mar	1 if data is collected from January–March quarter and 0, otherwise (base category)
Apr-jun	1 if data is collected from April-June quarter and 0, otherwise
Jul-sept	1 if data is collected from July-September quarter and 0, otherwise
Oct-dec	1 if data is collected from October-December quarter and 0, otherwise
2012	1 if data is from 2012 and 0, otherwise (base category)
2013	1 if data is from 2013 and 0, otherwise
2014	1 if data is from 2014 and 0, otherwise
2015	1 if data is from 2015 and 0, otherwise
2016	1 if data is from 2016 and 0, otherwise
2017	1 if data is from 2017 and 0, otherwise

Agribusiness activity /CNAE-Domicile activity category	Coefficient
Fertilizers and soil correctives / Manufacture of other chemical products.	0.194
Agricultural pesticides / Manufacture of other chemical products n.e.c.	0.046
Animal feed / Grinding and starch products and animal feed	0.368
Veterinary medicines / Manufacture of pharmaceutical products	0.090
Agricultural machinery / Manufacture of machinery and equipment	0.198
Grinding and starch products (except animal feed) / Grinding and starch products and animal feed	0.632
Natural-based textiles / Preparation of fibers, spinning and weaving	0.397
Clothing and clothing accessories (natural-based)^*/ Clothing and clothing accessories	0.357
Wooden furniture / Manufacture of furniture	0.742

Segment	Employed Persons	%
Inputs production	218,929	1.20%
Primary activities	8,418,141	46.16%
Industry	3,873,653	21.24%
Agro-services	5,728,084	31.41%
Agribusiness	18,238,807

	Agribusiness					Brazil
	Inputs	Primary	Industry	Agro-services	Agribusiness	Brazil
Employment status
Employed w. formal contract	61.8%	16.7%	62.9%	45.4%	36.1%	40.1%
Employed w/o formal contract	8.1%	21.4%	10.5%	13.6%	16.5%	19.1%
Employers	2.6%	3.5%	3.7%	6.0%	4.3%	4.7%
Self-employed	15.9%	44.6%	20.3%	23.5%	32.5%	25.0%
Other	11.6%	13.7%	2.6%	11.5%	10.6%	11.1%
Final level of schooling
No instruction	6.9%	14.6%	3.6%	2.3%	8.3%	4.0%
Incomplete basic	26.5%	52.7%	26.6%	16.6%	35.5%	23.5%
Completed basic	7.3%	9.7%	12.0%	8.0%	9.6%	8.9%
Incomplete secondary	5.9%	5.7%	8.4%	6.6%	6.6%	6.5%
Completed secondary	29.7%	14.2%	35.7%	37.9%	26.4%	32.6%
Incomplete college	5.9%	0.9%	4.3%	7.3%	3.7%	5.7%
Completed college	17.8%	2.1%	9.4%	21.3%	9.9%	18.8%

Variable/statistic	Agribusiness		Non-agribusiness
Variable/statistic	Mean	Std. Dev.	Mean	Std. Dev.
Income	1,412.72	2,114.26	2,164.99	2,981.62
No_inst (schooling)	0.13	0.34	0.03	0.18
Basic_Inc	0.47	0.50	0.21	0.41
Basic_Comp	0.10	0.31	0.10	0.30
Second_Inc	0.05	0.23	0.06	0.23
Second_Comp	0.19	0.39	0.35	0.48
College_Inc	0.02	0.13	0.06	0.24
College_Comp	0.04	0.19	0.19	0.39
Women (gender)	0.23	0.42	0.46	0.50
Age	39.66	12.49	38.24	11.88
White (Race or skin tone)	0.41	0.49	0.48	0.50
Black	0.07	0.26	0.08	0.27
Yellow	0.00	0.05	0.01	0.08
Brown	0.51	0.50	0.43	0.49
Indigene	0.00	0.05	0.00	0.04
Other_race	0.00	0.02	0.00	0.02
Emp_formal (employment status)	0.33	0.47	0.45	0.50
Emp_informal	0.17	0.38	0.18	0.38
Employer	0.03	0.17	0.04	0.21
Self-employed	0.36	0.48	0.21	0.41
Other_status	0.12	0.32	0.11	0.32
Center-West (region)	0.08	0.27	0.08	0.27
North	0.12	0.33	0.07	0.25
Northeast	0.30	0.46	0.23	0.42
Southeast	0.29	0.46	0.47	0.50
South	0.20	0.40	0.15	0.36
econ_set1	0.47	0.50	-	0.00
econ_set2	0.24	0.43	-	0.00
econ_set3	-	-	0.01	0.08
econ_set4	0.16	0.37	-	-
econ_set5	0.01	0.09	0.03	0.18
econ_set6	0.05	0.22	-	-
econ_set7	0.06	0.24	0.07	0.25
econ_set8	-	-	0.01	0.11
econ_set9	-	-	0.10	0.30
econ_set10	-	-	0.33	0.47
econ_set11	-	-	0.04	0.20
econ_set12	-	-	0.04	0.19
econ_set13	-	-	0.38	0.49

	Agribusiness	Percentage differencea Agrib.	Non-agribusiness	Percentage differencea Non-agrib.	p-value
Black	-0.1570^***	-14.53	-0.1242***	-11.68	0.0000
	(0.0064)		(0.0031)
Yellow	0.1253***	13.35	0.0928***	9.72	0.5029
	(0.0432)		(0.0179)
Brown	-0.1638***	-15.11	-0.1151***	-10.87	0.0000
	(0.0040)		(0.0022)
Indigenous	-0.2276***	-20.36	-0.0798***	-7.67	0.0000
	(0.0302)		(0.0140)
Other_race	-0.1107^**	-10.48	-0.1033***	-9.81	0.8827
	(0.0450)		(0.0255)
Basic_Inc	0.1882***	20.71	0.1534***	16.58	0.0000
	(0.0043)		(0.0032)
Basic_Comp	0.3560***	42.76	0.3112***	36.51	0.0000
	(0.0059)		(0.0036)
Second_Inc	0.3809***	46.36	0.3518***	42.16	0.0003
	(0.0074)		(0.0039)
Second_Comp	0.4895***	63.15	0.4814***	61.83	0.2643
	(0.0066)		(0.0038)
College_Inc	0.7009***	101.56	0.6616***	93.79	0.0059
	(0.0140)		(0.0050)
College_Comp	1.1348***	211.06	1.1689***	221.85	0.0190
	(0.0152)		(0.0077)
Women	-0.3595***	-30.20	-0.3669***	-30.71	0.1079
	(0.0044)		(0.0016)
Age	0.0438***		0.0486***		0.0000
	(0.0008)		(0.0005)
Age2	-0.0004***		-0.0005***		0.1683
	(0.0000)		(0.0000)
Emp_informal	-0.4093***	-33.59	-0.3228***	-27.59	0.0000
	(0.0060)		(0.0020)
Employer	0.5013***	65.09	0.5195***	68.12	0.1766
	(0.0129)		(0.0057)
Self-employed	-0.4881***	-38.62	-0.2171***	-19.52	0.0000
	(0.0073)		(0.0023)
Other_status	0.0000	0.00	0.2279***	25.60	0.0000
	(.)		(0.0039)
North	-0.4326***	-35.12	-0.1987***	-18.02	0.0000
	(0.0119)		(0.0061)
Northeast	-0.7222***	-51.43	-0.3469***	-29.31	0.0000
	(0.0088)		(0.0056)
Southeast	-0.1588***	-14.68	-0.0706***	-6.82	0.0000
	(0.0080)		(0.0051)
South	-0.0429***	-4.20	-0.0512***	-4.99	0.3729
	(0.0087)		(0.0050)
Econ_set1	-0.2063***	-18.64	0.0000	0.00	0.0000
	(0.0084)		(.)
Econ_set2	-0.0826***	-7.93	0.0000	0.00	0.0000
	(0.0090)		(.)
Econ_set3	0.0000	0.00	0.1926***	21.24	0.0000
	(.)		(0.0142)
Econ_set4	-0.0949***	-9.05	0.0000	0.00	0.0000
	(0.0085)		(.)
Econ_set5	-0.1315***	-12.32	-0.2243***	-20.09	0.0000
	(0.0182)		(0.0058)
Econ_set6	-0.0685***	-6.62	0.0000	0.00	0.0000
	(0.0105)		(.)
Econ_set8	0.0000	0.00	-0.1543***	-14.30	0.0000
	(.)		(0.0075)
Econ_set9	0.0000	0.00	-0.0542***	-5.28	0.0000
	(.)		(0.0039)
Econ_set10	0.0000	0.00	-0.1176***	-11.09	0.0000
	(.)		(0.0035)
Econ_set11	0.0000	0.00	0.0962***	10.10	0.0000
	(.)		(0.0067)
Econ_set12	0.0000	0.00	0.0310***	3.15	0.0000
	(.)		(0.0058)
Econ_set13	0.0000	0.00	-0.1678***	-15.45	0.0000
	(.)		(0.0037)
_cons	6.4254***		6.2032***		0.0000
	(0.0188)		(0.0101)
r2	0.49		0.48
F	1819.08		5051.52

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E-mail: sober@sober.org.br

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[1] Notes:

[TFN1] ^*
highest level of instruction achieved;

[TFN2] ^**
both in the private and public sectors and also as domestic workers;

[TFN3] ^***
includes administrative activities; public administration, defense and social security; education; human health and social services; arts, culture, sports and recreation; other service activities; domestic services; international organizations and other extraterritorial institutions; and activities not defined.

[5] Source: Author’s results.