What are the differences in income inequality and social mobility between different groups in Brazil? What links between economic, political, and cultural processes contribute to poverty and hinder social mobility? This paper by the World Bank analyses the process of social exclusion in Brazil and the perceptions that Brazilians have of inequality. Brazil is not a poor country, but an unequal one with a large population of poor people. Income inequality is the main restriction on economic growth. Brazilians from all social groups wrongly perceive this as a result of fair rules and poor administration.
Despite economic growth and stability, Brazil has one of the largest gaps between rich and poor in the world, with the wealthiest one per cent earning more than the poorest 50 per cent. Brazil’s pattern of development has benefited non-poor rather than poor groups. Previous research has focussed on factors that contribute to poverty and inequality. There has been little analysis of why certain groups are excluded from opportunities and access to resources.
Spatial location is a key factor in social exclusion and poverty. Rural populations, especially in the North-East, are disproportionately affected, and face geographic obstacles to social mobility. Inequality related to location is also a factor within urban areas, with slum dwellers facing discrimination and exclusion.
Brazilians recognise their society as very unequal. However, they trust that the Constitutional rules allowing mobility apply, without questioning if the rules are enough to bring about required changes. Other findings are:
- Extremely high inequality is the main reason for Brazil’s low poverty-growth elasticity
- Unemployment, underemployment, and precarious employment are key factors of exclusion, especially for youth
- Women’s participation in the labour market has grown, but largely in the informal sector. Gender segregation in formal employment means that women have unequal opportunities, lower positions and worse pay
Social security provision has reduced poverty for old people
- ‘Brazilian-style racism’ contributes to persistent poverty and marginalisation of the non-white population (which makes up 45 per cent of the total population).
Income inequality is a main restriction of poverty reduction in Brazil. Redistributive as well as growth policies are needed, requiring a focus on institutions and shift in public attitude. This requires focussing on developing institutions and delivery mechanisms that will create a more inclusive, accountable and cohesive society. A shift in attitude is required away from placing all responsibility and blame on the state. Systematic policies that build civil society, government partnerships, and strengthened participation and citizenship are needed to do this. Civil society needs to cooperate with government and assume direct responsibility for creating the conditions for change. Areas for specific attention are:
- Ensuring access to labour markets through affirmative action policies, and mechanisms to minimise risks and vulnerability in the informal labour market
Facilitating access to assets, especially expanding and consolidating the land reform programme
- Expanding and improving social security. Pension and retirement earnings have a significant impact on reducing poverty among old people, but needs better targeting for the poorest to benefit
- Decreasing race and gender inequality and discrimination through affirmative action, targeted programmes and widening the scope of labour rights
- Focussing on youth by decreasing social risks, strengthening civic participation, and developing entrepreneurial skills
- Improving the quality of education for marginalised groups.
