Who lost the most from Covid? Initial impacts of Covid-19 on the Brazilian labor market

Abstract

The COVID-19 pandemic has profoundly exacerbated the crisis in the Brazilian labor market. Against this backdrop, our study seeks to identify the characteristics that render workers more vulnerable to declines in occupational status, with a particular focus on informal workers. To this end, we employ a multinomial logit model and the Oaxaca-Blinder decomposition. The findings underscore the intensification of structural inequality in Brazilian society during periods of crisis, highlighting the critical role of informality, which may even surpass individual worker characteristics in explaining the risk of unemployment. Informal workers also faced heightened risks concerning labor income and wage disparities.