Covid, Economic Classes and the Middle Path: Chronicle of the Crisis up to August 2020

Marcelo Neri, Director of FGV Social and founder of the Center for Social Policies at the Fundação Getulio Vargas (FGV) published recent research on the immediate effects of the Covid-19 pandemic on the Brazilian Economic Classes.

Brazil has been suffering from the Covid-19 pandemic and now there is a vast amount of data available to accurately estimate its impacts. In particular, the PNAD Covid household survey, which is organized by IBGE (Brazilian National Institute of Geography and Statistics), assembles different information from the population, such as health, labor status, education, loans, grants, etc.

These information are available from May 2020 onwards in weekly reports, offering data comparable to an usual PNADC (Continuous National Survey by Household Sample) monthly report. Every month, the IBGE also discloses consolidated tables presenting individual microdata. However, this evidence do not cover information concerning all sources of per capita household income, thus hindering our capacity of estimating usual poverty and inequality indicators based on income.

The challenge is to compare data gathered before the pandemic and after it has reached the country. Different scholars have been trying to address this issue by simulating income changes from 2019 onwards based on available information on how different government’s programmes designed to mitigate the pandemic’s effects work and probably affect the income distribution, for instance the Emergency Grant and the Suspension of Job Contracts.

In this executive summary we present tables and graphs with data for different income brackets based on the minimum wage, which were implicitly disclosed by the IBGE in July and August 2020, as a proxy for different economic classes. Our goal is to develop tables that are comparable in time using equivalent income ranges in real terms. The main goal here is to analyse the levels and changes observed for the population according to different income ranges before and after the pandemic has reached the country. The center of the analysis is the variation observed between 2019 and August 2020, as the reader will notice throughout the text. However, given our goal of better understading recent changes (already during the pandemic) we have also assessed two other periods: from 2019 to July 2020; and between July and August 2020.

To access the page of the study, click here.

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