Keywords
Labor market
Constraints to growth
Metrica
How to Cite
Abstract
This paper examines the consequences of the rapid demographic transition revealed by the 2022 Demographic Census on the Brazilian labor market and economic growth. The slowdown in the growth of the working-age population, to only 0.24% in 2025, imposes an unprecedented constraint on the growth of the labor supply. However, the demand for labor tends to grow at a strong pace, even at low levels of economic growth, if the rate of productivity growth of recent decades is maintained. Using a simple OLS model, we estimate, based on data from the PNAD Contínua, a GDP elasticity of employment of 0.83. Therefore, for GDP to grow at around 3% per year, the demand for labor would grow by about 2.5%. Once the stock of unemployed is exhausted, we estimate that the future rate of economic expansion would have to decrease to 1.25% per year, except for a combination of increases in the labor force participation rate, immigration, and increased labor productivity.
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