Estimating the Employment and GDP Multiplier of Emergency Cash Transfers in Brazil

Author/Editor:

Daniel Cunha ; Joana Pereira ; Roberto Accioly Perrelli ; Frederik G Toscani

Publication Date:

March 18, 2022

Electronic Access:

Free Download. Use the free Adobe Acrobat Reader to view this PDF file

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary:

We estimate the subnational employment and GDP multiplier of Brazil's 2020 federal cash transfers to vulnerable households. Using two-stage least squares regressions we estimate a formal employment multiplier and then apply an analytical transformation to recover an implied GDP multiplier in the range of 0.5-1.5. The lower bound of this range lies below most estimates in the literature, which may result from the exceptional constraints imposed by the pandemic on supply chains and consumption. Nevertheless, even using the lower end of our range implies that federal cash transfers played an important role in supporting employment and GDP.

Series:

Working Paper No. 2022/055

Frequency:

regular

English

Publication Date:

March 18, 2022

ISBN/ISSN:

9798400204708/1018-5941

Stock No:

WPIEA2022055

Pages:

39

Please address any questions about this title to publications@imf.org