The contractionary effects of PEC Emergencial: the impact of the uncertainty of public sector wage payments on the Brazilian economy

Authors

  • Edson Paulo Domingues Centro de Desenvolvimento e Planejamento Regional, Universidade Federal de Minas Gerais, Brasil
  • Débora Freire Cardoso Centro de Desenvolvimento e Planejamento Regional, Universidade Federal de Minas Gerais, Brasil
  • Aline Souza Magalhães Centro de Desenvolvimento e Planejamento Regional, Universidade Federal de Minas Gerais, Brasil
  • Thiago Cavalcante Simonato Centro de Desenvolvimento e Planejamento Regional, Universidade Federal de Minas Gerais, Brasil

DOI:

https://doi.org/10.21171/ges.v14i40.3174

Keywords:

Public expenditure, austerity, labor, wages, computable general equilibrium

Abstract

This work aims to project the main economic impacts of the reduction of up to 25% of salaries and working hours of the civil servants, foreseen in the Proposed Constitutional Amendment (PEC) 186. The results point out significant negative effects on the sectors, in addition to effects on GDP and employment in the short and medium term. The simulations indicate that GDP may decline from -1.4%, to the 25% cut, to -0.30%, to a 5% cut, as a short-term effect of this type of policy. In the medium term, the negative impact is permanent if the measure is not reversed: -1%, for a 25% cut, and -0.2%, for a 5% cut.

 

Keywords: Public expenditure, Austerity, Labor, Wages, Computable General Equilibrium.

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References

CARDOSO, G.; FREIRE, D.; DOMINGUES, E. P. Austeridade fiscal no Brasil: Impactos na renda das famílias e na atividade econômica. In: 18 Seminário de Diamantina, 2019, Diamantina. Anais do 18 Seminário de Diamantina, 2019.

CARDOSO, G. Política fiscal e gasto público no Brasil: impactos na renda das famílias e na atividade econômica. Dissertação (Mestrado em Economia) – Centro de Desenvolvimento e Planejamento Regional, Faculdade de Ciências Econômicas, Universidade Federal de Minas Gerais, Belo Horizonte, 2019.

DRÈZE, J. H; MODIGLIANI, F. Consumption Decisions under Uncertainty. Journal of Economic Theory, 5, 308–335, 1972.

INSTITUIÇÃO FISCAL INDEPENDENTE. Retrato das despesas de pessoal no serviço público federal civil Parte 1. Brasília: ESTUDO ESPECIAL Nº 11. Dez, 2019.

SOUZA, K B; CARDOSO, D F; DOMINGUES, E P. Medidas Recentes de Desoneração Tributária no Brasil: Uma Análise de Equilíbrio Geral Computável. Rev. Bras. Econ. [online]. 2016, vol.70, n.1 [cited 2020-02-27], pp.99-125. Available from: <http://www.scielo.br/scielo.php?script=sci_arttext&pid=S0034-71402016000100099&lng=en&nrm=iso>. ISSN 0034-7140. https://doi.org/10.5935/0034-7140.20160006.

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Published

2020-08-31

How to Cite

Domingues, E. P., Cardoso, D. F., Magalhães, A. S., & Simonato, T. C. (2020). The contractionary effects of PEC Emergencial: the impact of the uncertainty of public sector wage payments on the Brazilian economy. Management & Society Electronic Journal, 14(40), 3964–3174. https://doi.org/10.21171/ges.v14i40.3174

Issue

Vol. 14 No. 40 (2020): September/December 2020

Section

Articles

License

As author of the attached article, I authorize its publication, once approved, in the Revista GES - Gestão e Sociedade. I declare that this article is of my autorship and transfer, in a free and definitive manner, the resulting property rights. I also assume full responsibility for its content.

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