IMF Working Papers

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

By Daniel Cunha, Joana Pereira, Roberto Accioly Perrelli, Frederik G Toscani

March 18, 2022

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Format: Chicago

Daniel Cunha, Joana Pereira, Roberto Accioly Perrelli, and Frederik G Toscani. "Estimating the Employment and GDP Multiplier of Emergency Cash Transfers in Brazil", IMF Working Papers 2022, 055 (2022), accessed November 7, 2025, https://doi.org/10.5089/9798400204708.001

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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.

Subject: COVID-19, Employment, Health, Informal employment, Labor, Population and demographics, Public employment

Keywords: Cash transfer program, COVID-19, Employment, Employment multiplier, Fiscal multipliers, GDP multiplier, Household cash transfer, Household cash transfers, Informal employment, Labor informality, Multiplier of emergency cash transfer, Public employment

Publication Details

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