Assessing the ways in which Brazil’s urban areas have
created economic opportunities for young people.
Professor Carlos Leite
Co-authors: Carolina Bracco and Mariana Guerra
Paper prepared for the Centre for Development and Enterprise,
commissioned for Cities of Hope project, June 2013.
This paper has only been edited lightly for clarity.
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Assessing the ways in which Brazil’s urban areas have created
economic opportunities for young people
Carlos Leite1
Co-authors:
Carolina Bracco, MSc., FAU.Mackenzie; Mariana Guerra, MSc., FAU.USP
Sao Paulo, Brazil, June 2013
1
Carlos Leite is an Architect and Urbanist, with a Master and PhD in Urban Studies from the University of Sao Paulo
and a Postdoc from California Polytechnic University in Sustainable Urban Economic Development. He is Professor at
the School of Architecture and Planning, Mackenzie Presbyterian University and Visiting professor at Fundaçao Dom
Cabral Business School. He has been Visiting Professor/Researcher in many different institutions as CalPoly,
Parsons/NY, IaaC/Barcelona, Columbia and UC Berkeley and consultant (Inter-American Development Bank). He is
author of Sustainable Cities, Smart Cities in Brazil in 2012. [email protected]
1
Summary
1
Urban Brazil: Emerging Economy, Emerging Opportunities for Young City Dwellers?
2
Brazilian Megacities and Economic Opportunities for Young People
2.1
Sao Paulo
2.2
Rio de Janeiro
2.3
Informal Territories in Reinvention: Spatial Externalities and Intangible
Attributes Emerging on the Borders
3
Conclusions
4
References
2
1
Urban Brazil: Emerging Economy, Emerging Opportunities for Young City Dwellers?
Despite Europe’s financial crisis and the slow recovery of the USA, the investments in the
countries that compose the BRICS2 group (Brazil, Russia, India, China and South Africa) has been
multiplied by 3 during the last 10 years, being only 6% of world’s total in 2000 and 20% in 2012.
As a member of the BRICS the expectation of Brazil’s growth was high, but recent research shows
that the country has the lowest growth performance of the group, increasingly so (falling from
2,7% to 0,8%) not only among the BRICS group but also among its neighbours Argentina (4,8%),
Chile (5,6%), México (4,6%), Peru (6%) and Venezuela (5,6%).
Brazil’s performance compared to other countries of the BRICS could be better especially because
the country has been receiving global investments due to events such as 2014 World Cup and
2016 Olympic Games that will be hosted by Brazil.
According to Luis Carlos Prado, professor of Economics at UFRJ 3 , this scenario of decreasing
growth will force Brazil to face some of its biggest issues such as development of education and
infrastructure (highways, railways, airports and ports poorly maintained that disturb production
flow and distribution of imports)4.
Nevertheless, according to the magazine ISTO É Dinheiro5 (“This is Money”), the domestic market
is a secure vector to economic growth due to the credit expansion, the prospect of lower interest
rates, the introduction of the social class “C” among the consumer market, increase of
commodities’ exportation, exploration of pre-salt layer, and attractiveness of investments due to
2014 World Cup and 2016 Olympic Games.
A survey conducted between the end of November and the beginning of December of 2011 with
155 executives of 128 firms, done by consulting Robert Half for ISTO É DINHEIRO shows high levels
of optimism among Brazilian entrepreneurs.
Urban and metropolitan Brazil
According to the Brazilian Institute of Geography and Statistics (IBGE), the ten largest Brazilian
metropolises are: Belém, Fortaleza, Recife, Salvador, Distrito Federal, Belo Horizonte, São Paulo,
Rio de Janeiro, Curitiba e Porto Alegre (Figure 1).
2
http://www.itamaraty.gov.br/temas/mecanismos-inter-regionais/agrupamento-brics
3
http://oglobo.globo.com/economia/economia-do-Brazil-tem-pior-desempenho-entre-brics-5101277
4
http://congressoemfoco.uol.com.br/opiniao/forum/brics-qual-o-papel-do-Brazil-neste-grupo/
5
Revista ISTO É DINHEIRO, nº ediçao: 743 - O país das oportunidades.
http://www.istoedinheiro.com.br/noticias/76101_O+OTIMISMO+DO+BRAZIL+QUE+PRODUZ
3
Disponível
em
Figure 1: Brazil’s ten largest metropolises (2009). Source: Instituto de Pesquisa Econômica Aplicada (IPEA), 2013,
p.11. <http://www.ipea.gov.br/portal/images/stories/PDFs/TDs/td_1813.pdf> Accessed: 20/04/2013
The main cities of these metropolises will host 2014 World Cup, together with the cities of Cuiabá,
Manaus and Natal. With the upcoming event, the host cities have been receiving considerable
investments for infrastructure improvements.
It’s estimated that more than U$12,5 billion will be put into airports, football stadiums and new
transportation systems. São Paulo and Rio de Janeiro receive the core of the investments, since
they’ll host, respectively, the opening and the closure of the World Cup.
The metropolises of São Paulo and Rio de Janeiro are referential among Brazilian economics,
concentrating the largest populations and demographic densities of the whole country, and are
also the cities in which people take more time to go from their houses to their work (Chart 1).
4
Chart 1: Features of the largest metropolitan areas (2010)
Metropolitan
Population
area
Total
Demograp
GDP
area
hic density
capita
(Km²)
(in/Km²)
(2008)
per
Motorizati
Average travel
on rate
time
home-
work (min)
Sao Paulo
19.443.745
7.943,8
2.447,7
30.349,52
38,1
42,8
Rio de Janeiro
11.835.708
5.643,8
2.097,1
19.762,04
20,8
42,6
Belo
4.883.970
14.415,9
338,8
19.540,41
29,6
34,4
Porto Alegre
3.978.470
9.800,2
406,0
23.225,00
31,2
27,7
Recife
3.870.004
2.768,5
1.397,9
13.592,95
15,3
34,9
Fortaleza
3.615.767
5.783,6
625,2
11.715,26
14,7
31,7
Salvador
3.573.973
4.375,1
816,9
17.721,18
16,0
33,9
Curitiba
3.223.836
15.418,5
209,1
22.953,67
41,6
32,1
Distrito
2.570.160
5.801,9
443,0
45.873,47
37,3
34,8
2.101.883
1.819,3
1.155,3
9.228,27
11,2
31,5
Horizonte
Federal
Belém
Source: Instituto de Pesquisa Econômica Aplicada (IPEA), 2013, p.12.
<http://www.ipea.gov.br/portal/images/stories/PDFs/TDs/td_1813.pdf> Accessed: 20/04/2013
According to IBGE , Brazil has an area of 8.5 million m².
The National Survey by Sample Household (PNAD) of 2011 shows the existence of a population
of 195,2 million people and a demographic density of 22,9in/km².
The Brazilian population is not equally distributed, with for instance the Amazonas State, , with
an area that corresponds to 18,4% of national territory having a demographic density of
2,3in/km²; whereas Distrito federal, with an area that represents less than 0,1% of national
territory, had a demographic density of 462,1 in/km² (Chart 1).
North Region and Middle West concentrate, respectively, 8,5% and 7,5% of Brazilian population,
whereas the Southeast region concentrates 42%, with a population of 82,1 million.
Sao Paulo (21,6%) and Minas Gerais (10,2%) are the federation unities with the largest
populations.
The population is also unevenly concentrated in the metropolitan areas . Whereas Rio de Janeiro’s
metropolitan area concentrates 73,7% of the population of the entire state as opposed to Sao
5
Paulo’s 48%, Belo Horizonte and Salvador’s metropolitan areas concentrate only about a quarter
of the population of its states.
Charts 2/3: Ranking of the population of the metropolitan areas of Brazil (2010) and list of the ten cities with the
highest population.
Ranking of the population of the metropolitan areas of Brazil – 2010
Metropolitan
Areas 2010
State
Population Rank in
2010
List of the ten cities with the highest population
% of the population
of the
corresponding state
RANKING DAS POPULAÇÕES REGIÕES METROPOLITANAS DO BRASIL- 2010
% da população
do estado
correspondente
County
Population
in 2010
LISTA DOS DEZ MUNICÍPIOS
COM MAIOR POPULAÇÃO
Município
População
em 2010
Regiões
Metropolitanas 2010
Estado
População Posição
(n° hab.)
em 2010
São Paulo
SP
19.672.582
1
48%
1 - São Paulo
Rio de Janeiro
RJ
11.711.233
2
74%
2 - Rio de Janeiro
6.323.037
Belo Horizonte
MG
5.413.627
3
28%
3 - Salvador
2.676.606
Porto Alegre
RS
3.960.068
4
37%
4 - Brasília
2.562.963
Recife
PE
3.688.428
5
34%
5 - Fotaleza
2.447.409
Fortaleza
CE
3.610.379
6
43%
6 - Belo Horizonte
2.375.444
Salvador
BA
3.574.804
7
25%
7 - Manaus
1.802.525
Curitiba
PR
3.168.980
8
30%
8 - Curitiba
1.746.896
Campinas
SP
2.798.477
9
7%
9 - Recife
1.536.934
Manaus
AM
2.210.825
10
63%
10 - Porto Alegre
1.409.939
11.244.369
Source: IBGE (PNAD 2011)
Until the 1940s the country presented high levels of fertility and mortality. With the decrease of
mortality levels, Brazil’s population growth rose to almost 3% per year during the 50s.
During the 60s, fertility levels began to drop very slowly, which was the beginning of a slowdown
in the population growth which continued to drop during the following decades.
Comparing to 2000 census, Brazilian population has grown 12,3%, with a corresponding annual
growth of 1,17% (Graphic 1):
6
Graphic 1: Geometric average annual growth. Brazil 1872/2010. Source: Recenseamento do Brazil 1872 – 1920. Rio
de Janeiro: Directoria Geral de Estatística, 1872 – 1930; e IBGE, Censo DemoGraphic 1940/2010.
The growth hasn’t been uniform in the Great Regions of the Federation either.
The highest rates were observed in the North and Middle West regions, where the immigration,
due to the attraction brought by the agribusiness, contributed to a differential growth. The ten
Federation Units that have the higher population growth in relative terms are in this region.
Northwest and Southeast regions showed a similar population growth, slightly higher that 1% per
year. In the Southeast region, there was decreasing growth rate.
The South region, that since 1970 census had an annual growth of about 1,4%, had the lowest
growth, being influenced by the low rates observed in the states of Rio Grande do Sul and Paraná,
of 0,49% and 0,89%, respectively.
The country registered, in 2011, an urbanization rate of 85%. The Northeast region has the lowest
urbanization rate: 73,7%. Maranhão (60,2%) and Piauí (66,5%) are the least urbanised. At the
other side, Rio de Janeiro (97,4%) and São Paulo (96,8%) concentrate almost all of their population
in urban areas.
The rural population reduced by about 2 million people between 2000 and 2010, mainly due to
rural to urban migration.
Within the country, the Southeast region lost the most significant proportion of its rural
population (6,9 million to 5,7 million). The South region lost more than 600 000 people of the
rural population, dropping to an rural population of only 4,1 million in 2010. The Northeast region,
that still concentrates almost half of Brazilian rural population (14,3 million), saw its rural
population decreasing with just over 500 000. Finally, regions in the North and Middle West, saw
7
an increase of 313 606 people and 31 379 people in its rural populations, adding up in 2010 to 4,2
million and 1,6 million respectively.
The North region concentrates the four states that had the highest growth rate of rural population
during the period analysed—Roraima, Amapá, Pará and Acre.
In respect to migration, according to IBGE, major axes observed in the past are losing intensity
and there is a tendency to return to areas of origin. The Southeast region has lost much of its
attractiveness and the Northeast continues to lose inhabitants, but on a smaller rate than in the
past decades.
In Brazil, significant population shifts emerged, with Minas Gerais and Rio de Janeiro loosing
attractiveness among migrants whereas especially in Northeast, medium-sized cities in the
country are becoming more popular due to the increasing importance of commuting (to work
and/or study), the depletion of agricultural expansion and migration to Paraná.
This trend is confirmed by the 2010 Census which showed that cities with less than 500 000
inhabitants are the fastest growing in the country, possibly under the influence of migration, while
also large cities continue to concentrate a significant portion of the population (approximately
30%).
However, the percentage of municipalities that have had population losses is more significant
among the smaller ones and more than 60.0% of those with less than 2000 inhabitants in 2010
showed negative growth rate during the referred period.
According to research by IPEA (Institute of Applied Economic Research), 3.327 million Brazilians
left their home states between 2003 and 2008. Of those, 45.6% were young people, aged
between 18 and 29 years, and had an unemployment rate lower than that of non-migrants, and
had a tendency to formality, but with a working over 45 hours per week.
An analysis of the population distribution by age points to an aging trend of the age structure,
mainly due to the decline in fertility rates. Graphic 2, depicting the percentage distribution of
the resident population during the period 2001-2011, shows a narrowing base of the pyramid,
where the low age population is found, and a extending of the top, represented by a population
of more than 25.
Reason of the dependency of young and old people
The total dependency ratio measures the ratio between the number of people considered
inactive (people under 15 or over 60 years old) and potentially active people (people aged 15 to
59 years). This indicator can be examined, too, in each of the age groups economically dependent,
being then called dependency ratio of young and elderly dependency ratio.
In Brazil, the total dependency ratio shows that there is a decrease of the economically dependent
group compared to the group of people potentially active. In 2001, this indicator was 60.3 per
8
economically dependent people for every 100 people in potentially active age, falling to 54.6 in
2011.
The relative increase in potentially active age population can be a good economic opportunity for
the country, provided that such people are inserted in the labour market, especially in high-skilled
jobs.
The data also reflect the strong aging process of the population: from 2001 to 2011, the
proportion of people between 0 and 14 years for each 100 persons between 15 and 59 years of
age decreased from 45.8 to 36.0. At the other extreme, the number of people between 60 years
or older for every 100 people of working age potentially active increased from 14.5 to 18.6.
The dependency ratio of the younger age cohorts follows the differences in population dynamics
among the major regions. In 2011, the ratio in Northeast is still higher than that found in the
Southeast region ten years before.
To contextualise the dynamics of the Brazilian population in a worldwide context, let’s look at the
dependency ratio of young and elderly for different regions and countries. In 2011, the total
dependency ratio in the world was 63.3 dependents for every 100 people of working age, of which
the young component was 42.7 and the older 20.6. The population composition of each country
holds specific challenges in relation to the development of social policies (Graphic 2).
9
Dependency ratio of young
Elderly dependency ratio
Graphic 2 - Dependency ratio of young and old people, according to the major areas and selected countries – 2011.
Source: World population prospects: the 2010 revision. New York: United Nations, Department of Economic and
Social Affairs, 2011. <http://esa.un.org/unpd/wpp/index.htm>. Accessed:: out. 2012.
Economic growth and reduction of social inequality rates
In the 2000s, Brazil had an overall increase in the contributions to the economy driven by the
growth of internal market; investments in social and physical infrastructure; and favourable
external factors. The challenge has been, therefore, reconciling economic growth with social
inclusion and sustainability.
10
The average growth of the Brazilian economy increased from 1.7% between 1998 and 2002, to
3.5% between 2003 and 2006 and 4.6% between 2007 and 2010, year in which the country
recorded the highest growth rate period: 7.5% (Graphic 3).
In 2012, Brazil's GDP grew only 0.9% compared to 2011, contrary to the expectations of the
Brazilian government, which initially estimated growth to be around 4.5%. The GDP per capita
reached U$ 11,288, remaining almost stable (0.1%) compared to 2011.
Asian
Crisis
Crisis
Nasdaq
Average 1,7%
Internacional
financial crisis
Average 3,5%
Average 4,6%
Sovereign
crisis
Average 4,7%
Graphic 3: GDP Growing (% per year). Source: IBGE.: Ministério da Fazenda.
<http://www.fazenda.gov.br/portugues/docs/perspectiva-economia-Brazileira/edicoes/Economia-Brazileira-EmPerpectiva-Mar-Abr12-alterado.pdf.> Accessed:: 25/04/2013.
The country has harnessed the opportune economic momentum to reduce poverty and social
inequality through policies that transfer incomes as well as an increase in the real minimum
wage, from R$ 371.5 in 2004 to R$ 678.00 in 2013.
According to the Institute of Applied Economic Research (IPEA), family income in Brazil has
increased at a faster pace than the Gross Domestic Product (GDP) in the last ten years. According
to the Institute, the per capita household income of the population increased 40.7% between
2003 and 2011, 13.3 points higher than the rate shown by GDP per capita, which rose 27.7% in
the period (Graphic 4).
11
Median income / Average income / GDP per capita
5,2% is the payroll growth in 2012, while GDP
per capita was stable
Graphic 4: Evolution of the PNAD income measure and GDP per capita - in points. Source: IBGE. Made by: IPEA.
<http://www.ihu.unisinos.br/noticias/518764-renda-das-familias-cresce-bem-acima-do-GDP-per-capita> Accessed:
25/04/2013
These actions had a positive impact on social indicators. Between December 2002 and December
2010, poverty in Brazil fell 50.64%, according to a study at the Center for Social Policy at FGV
(Fundaçao Getúlio Vargas). According to the survey, the income of the poorest 50% grew by
67.93% between December 2000 and December 2010. In the same period, the income of the
richest 10% grew by 10%. The country's goal is to begin 2014 with a level of poverty reduction of
around 70% (Graphic 5).
Expected fall of 69,4%
% of population data
*Estimates are based on data
from IBGE (PNAD, PME and
Censo) PNAD adjusted for Censo
and SMEs
Graphic 5: Poverty rate (% of population). Source: FGV. Elaboraçao: Ministério da Fazenda.
<http://www.fazenda.gov.br/portugues/docs/perspectiva-economia-Brazileira/edicoes/Economia-Brazileira-EmPerpectiva-Mar-Abr12-alterado.pdf> Accessed em: 25/04/2013
The challenge is not small: according to IBGE, in 2011, 8.5% of the population (16.27 million
people) lived in extreme poverty situation. Of this quota, 4.8 million have household monthly
nominal income equal to zero, and 11.43 million have income between U$ 0.60 and U$ 41.92.
The Gini coefficient also registered a significant decline in recent years, from 0,559 in 2004 to
0,508 in 2011 (Graphic 6):
12
Graphic 6: Gini coefficient of income distribution monthly. Sources for all persons 10 years or older with incomes
- Brazil - 1981/2011. Source: IBGE, PNAD, 1981/2011
Despite being very striking in Brazil, inequalities have shown a downward trend. In the period
2001-2011, it is observed that the top fifth percentile of the distribution of household income per
capita (richest 20%) decreased their share from 63.7% to 57.7%, representing a loss of 6% . At the
other extreme, the poorest 20% increased their share from 2.6% to 3.5% of total income (Graphic
6). The subsequent layers also increased their share. At the same time, the ratio of household
income per capita of the richest 20% compared to the poorest’ 20% fell during the period: in 2001,
the richest 20% perceived an income 24 times higher than that received by the 20% most poor.
In 2011 this ratio fell to 16.5 times. However, the numbers show that it’s a long way to
substantially change the Brazilian inequality scenario in the ownership of the total income, since
the richest 20% still hold 57.7% of revenue, in contrast to just over 11% held by the poorest 40%.
In terms of income distribution considering the colour or race, the great predominance of white
people in the richest 1% of the population has also decreased. In this range of income in 2001,
9.3% were black or brown, a proportion that went up to 16.3% in 2011. It is, in any case, still a
small participation, since black and brown people represent 51.4% of the population.
With regard to the Human Development Index, between 1980 and 2012, the value of the Brazilian
HDI grew from 0,522 to 0,730, ranking 85 in the world ranking (Graphic 7).
Evolution of the HDI
Comparison: Brasil X BRICS
13
Between 1980 and 2012, the value of the Brazilian HDI
increased from 0.522 to 0.730. Currently, the country
occupies the 85th position in the ranking
Brazil had the better performance than the average
of BRICS in all indicators that are part of the HDI
*Average for countries with high development – 0.758
*Average of the countries of Latin America and the Caribbean – 0.741
Graphic 7: Evolution of the HDI. Source: Relatório 2012. Índice de Desenvolvimento Humano.
<http://noticias.uol.com.br/infograficos/2013/03/14/Brazil-fica-na-85-posicao-no-ranking-mundial-de-HDI-vejaresultado-de-todos-os-paises.htm> Accessed: 25/04/2013
Labour market and employment formalisation
A favourable aspect of the country is the retraction of unemployment (Graphic 8) and the
significant expansion of formality of the Brazilian labour market during recent years. According to
the database of the General Register of Employed and Unemployed of the Ministry of Labour in
2011, nearly two million jobs CLT (Graphic 9) were generated. Among these jobs, 925 537 were
generated in the services sector; 452,077 in the trade sector; 222,897 in the construction industry;
and 215,472 in transformation industry.
14
Graphic 8: Evolution of unemployment 2003-2012. Source: PME/IBGE
Graphic 9: Creation of new posts of formal jobs 2003-2011. Source: CAGED Lei 4.923/65.
<http://portal.mte.gov.br/data/files/8A7C812D350AC6F801351616010B546D/Brazil%20Dezembro%202011%20co
m%20acertos.pdf>. Accessed: 25/04/2013
Emerging opportunities for young city dwellers?
Despite the extra job creation and formalisation, the shortage of high-skilled labour in Brazil
remains a great challenge. Currently, companies are being forced to import foreign high-skilled
professionals. The main reason for the shortage is the lack of skills due to a failing basic and
essential education system, especially in public education, and is particularly pernicious in the
areas of technical training and higher education.
15
The lack of high-skilled labour obstructs the development of human capital in the country
Because it limits the opportunities for young people, and thus also for economic growth, it has
become essential to develop public policies which support the youth.
The Brazilian Institute of Geography and Statistics (IBGE) categorises “young” as those between
the age of 15 and 24 years old. The reason for this is that people in this cohort require special
attention from public policy as they push the economy to create new jobs in labour market. On
the other hand, it is the most vulnerable group due to lack of employment, low education and
exposure to high rates of mortality due to external causes, including homicide and traffic
accidents.
IPEA's research (2009) shows that most young people are exposed to poverty and have great
difficulties in obtaining an income and being included in the labour market. In addition, gender
inequalities – as you see them in the Brazilian population as a whole – are being reproduced in
this young age catgory, making it extra difficult for young females to find a job..
Chart 4: Distribution by position in occupation of occupied people in the age.
______________________________________________________________________________________________
Occupational Position
10 to 14 years
15 to 17 years
18 to 24 years
25 to 29 years
1996
2006
1996
2006
1996
2006
1996
2006
Employee with signed
1,9
0,1
17,3
11,1
38,2
41,7
40,3
47,2
Employee unregistered
27,3
22,5
46,7
50,3
33,6
35,1
23,3
24,5
Own bank account
4,4
7,5
5,6
7,0
11,2
9,8
18,8
15,3
Employee
-
-
-
-
0,9
1,0
2,6
2,7
66,3
69,9
30,3
12,4
9,9
8,6
6,0
-
-
-
3,7
2,6
6,4
4,4
Unpaid
Military or official
31,4
-
Source: IPEA, 2009, p. 119.
About 2 million young people between 15 and 29 live in slums, the majority of this being black
(66.9%), and 30.2% live in households with an income per capita of up to half the minimum wage.
Approximately 84.8% of young people live in urban areas, being a little more than a third in
metropolitan areas, marked by high unemployment; violence; segregation; and impaired quality
of life. (IPEA, 2009, p.33)
From 2001 to 2011 there was an increase of 10.7 percentage points in the proportion of people
of16 years or older being employed in formal jobs. However, a significant portion of the
population (44.2 million people) remains in informal employment.
The North and Northeast had the lowest rates of formality (37.0% and 38.0%, respectively) and
the Southeast and South the highest (66.1% and 64.6% respectively). The Midwest Region ranked
third with 58.8% rate of formality (Graphic 10).
16
Brazil
North
Northeast
Southeast
South
Midwest
Graphic 10: Percentage of 16 years or older people engaged in formal work in Major Regions – 2001/2011. Source:
IBGE, PNAD 2001/2011
The expansion of formality can also be analysed according to the position occupied by workers in
the labour market (Graphics 11 and 12). In this case, the percentage of employees with a formal
contract also varies by sex: in 2011, this amounted to 56.8% of men and 35.1% women. In the
case of the latter, this may be seen as a result of the reduction of the number of domestic workers,
who in 2011 posed six million women. This is due to several factors, such as increased education
and increased employment in the service sector. The decrease is mainly between the maids
without a formal contract.
17
Employee
unpaid
with
signed
Employee
unregistered
Domestic
worker
with signed
Domestic
worker
unregistered
Military or
official
statutory
Own bank
account
Employer
Work in production
for own consumption
or in construction for
own use
Other
work
Graphic 11: Percent distribution of men aged 16 or older, according to the job position – Brazil – 2001/2011. Source:
IBGE, PNAD 2001/2011
Employee
unpaid
with
signed
Employee
unregistered
Domestic
worker
with signed
Domestic
worker
unregistered
Military or
official
statutory
Own bank
account
Employer
Work in production
for own consumption
or in construction for
own use
Other
work
Graphic 12: Percentage distribution of women aged 16 or older, according to the job position – Brazil – 2001/2011.
Source: IBGE, PNAD 2001/2011
18
The increased participation of women in the formal labour market occurred differently according
to race or colour. From 2001 to 2011, the number of black or brown women rose by 13.3
percentage points in formal work, while among whites the increase was 11.9 percentage points.
This is another indication that the country is slowly creating opportunities for social groups which
were historically excluded or marginalized. That said, these groups still have lower incomes
compared to whites of the same level of schooling.
Informality is quite common among the elderly over 60 years old (71.7%) and among young
people between 16-24 years of age (46.5%).
Young people, who often are seeking their first job, and thus for whom some experience in the
labour market is important, are more likely to accept jobs without a formal contract or enter into
occupations with low formalisation.
In 2011, of young people (16-24 years) who worked, 43.0% had an income below one minimum
wage (U$ 326.38), and only 13.1% had an income greater than 2 times the minimum wage. It
appears that most people in this age group have low incomes, even lower level than the minimum
wage established by law, which may be associated with more precarious and informal work. Of
them, 27.3% worked less than 40 hours per week, while, at the other extreme, 26.3% worked
more than 45 hours per week.
Apart from low wages and excessive working hours (which often compromises any study
activities), the unemployment rate in this age group is two to three times higher than that of older
adults.
The good news is that in recent the degree of formalization in the labour market for this group
increased, with a reduction of 12.7 percentage points in the rate of informality in the period 2006
to 2011 (Graphic 13).
16-24 years
25-29 years
30-49 years
50-59 years
Over 60 years
Graphic 13: Percentage of people 16 years or older engaged in formal employment, by age groups – Brazil –
2001/2011. Source: IBGE, PNAD 2001/2011
19
The data also suggests a relationship between schooling and formalisation. In 2011, the average
years of schooling of the population in formal jobs was 9.2 years for men and 10.7 years for
women. In informal jobs, the average was 6.1 years for men and 7.3 years for women. In both
types of work, women’s average education is higher than that of men.
The average yield in the main job of people of 16 years old or older currently is R$ 1,311.56 = U$
786,94, which saw a real increase of 16.5% over the period 2001-2011. Women and informal
workers were those with the largest real gains (22.3% and 21.2%, respectively).
Chart 5: Average yield of the main work of persons 16 years or older, employed during the reference week and in
formal and informal jobs, by gender (R$) – Brazil – 2011.
______________________________________________________________________________________________
Average yield of the main work of persons 16 years or older, employed during the reference week and in formal
and informal jobs, by gender (R$) – R$ 1 = U$ 0,60 (2011)
Occupied
Formal job
Informal job
Total
Men
Women
Total
Men
Women
Total
Men
Women
1 311,56 1 473,44 1 080,01
1 601,00 1 777,33 1 351,80
876,12
1 021,88 663,83
Source: IBGE, PNAD 2001/2011.
Although income inequality between men and women is decreasing, women still earn less than
men (on average, 73.3% of men’s income). Among the better educated (12 or more years of
study) inequality is even greater: women earn on average 59.2% of male income and in the
Northeast, the inequality of income in this group is the highest with women earning as little as
57.4% of the male equivalent.
The same phenomenon occurs among people of different colour and race: the average income
of black people employed aged 16 or older is equivalent to 60.0% of the average income of the
white population in this age group. In 2001, the income of blacks and browns was 50.5% of that
earned by whites. Like in the case of women, inequality is higher among people with 12 or more
years of study.
One of the biggest problems that Brazil faces today is the lack of high-skilled labour for new jobs.
Basic and fundamental education performance has improved, but didn’t keep pace with economic
growth, forcing companies to import professionals to compose their staff. It is a loss of
opportunity, especially for young people entering the labour market.
PNAD data reveal that there was a substantial growth in Brazilian educational system during the
last decade, especially in early childhood education (Graphic 14). The enrolment rate for children
between 0-3 years old rose from 10.6% in 2001 to 20.8% in 2011, and for children between 4-5
years old from 55.0% in 2001, to 77.4% in 2011. The increased access to early childhood education
has also had an impact on female occupation.
20
0-3 years
4-5 years
6 or 14 years
15-17 years
Graphic 14: The gross attendance rate to educational establishments by resident population.
Black or
brown
White
5stquintil
e
4stquintil
e
3stquintil
e
2stquintil
e
1stquintile
Midwest
South
Southeast
Northeast
North
Brazil
With regard to secondary education, the Northeast region deserves to be highlighted, since it
recorded the highest growth rate, doubling the frequency of young people at school of
appropriate age. Young people of black colour or mixed race and those belonging to the poorest
quintile also saw their attendance rate in high school r rising significantly, reflecting the relatively
low level from which they departed in the early period (Graphic 15).
Graphic 15: The net attendance rate to educational establishments by resident population from 15 to 17 years old,
in Major Regions; the fifth of the monthly household income per capita and the colour or race - 2001/2011. Source:
IBGE, PNAD 2001/2011.
The country also reduced the rate of early school leavers, which is the proportion of those who
had not completed high school and were not studying. There was a drop of 11.5 percentage points
in this rate, considering the years 2001 and 2011, from 43.8% to 32.2%.
In 2011, early school leavers included more than half of young people between 18-24 years of age
belonging to the poorest quintile, compared to the 9.6 per cent coming out of the richest quintile.
In future, these young people can become a more susceptible group to social exclusion.
21
The proportion of young people between 18-24 years of age with 11 or more years of full study
increased substantially from 33.7% to 54.1% in ten years.
1stquintile
2stquintil
e
3stquintil
e
4stquintil
e
5stquintil
e
Graphic 16: Average years of schooling of the population from 18 to 24 years, according to fifths of the monthly
household income per capita - Brazil - 2001/2011. Source: IBGE, PNAD 2001/2011.
No less important is the reduction of the illiteracy rate from 12.1% in 2001 to 8.6% in 2011. The
biggest drop in the illiteracy rate occurred among young people, 15-24 years of age, whose rate
fell from 4.2% to 1.5% during the period.
Qualitatively speaking, there’s still a big difference between private schools, which are attended
by only 13% of students in elementary and secondary education, and public schools. The
divergent profile of the students of the two schools reflects the duality of Brazilian educational
system: among the students who attended public school, only 8.6% belonged to the richest fifth,
whereas more than half of the students in private school are among the richest 20% of the
distribution of total household income.
The travel time from home to work is also an important contributor to people’s quality of life.
According to IBGE, although most of the employed population takes 30 minutes to get to work
(65.8%), there was an increase in the number of people who face a period of more than thirty
minutes. In the period 2001-2011, this time went from 32.7% to 35.2% for men and from 27.9%
to 32.6% for women.
Black people and people of mixed race are the ones who’s commute between home and their
workplace takes longer: in 2011, it was found that 36.6% of blacks and browns recorded a journey
exceeding 30 minutes, against 31.8% of whites.
22
In the case of the Southeast, where there are more people living in cities and the vehicle fleet is
larger, the percentage of workers with a travel time exceeding 30 minutes is 41.9%, and 44.3%
for black or brown people.
The commute takes longer, especially for people with lower income, who travel from the suburbs
to major centres. According to a study by the IPEA considering the nine largest metropolitan areas
and the Federal District, the travel time for low-income workers (1st income decile) is on average
20% longer than that of the richest (10th decile), and 19 % of the poorest spend more than an
hour's drive against only 11% of the richest.
Children, adolescents and young people
The approval of the Statute of Children and Adolescents (Law No. 8069 of 07.13.1990)
represented an improvement in the rights of children, adolescents and young adults. The country
has been trying to expand opportunities and create conditions to improve the quality of life for
this population group.
IBGE defines the young segment of the population as people between 15 and 24 years and sees
education, labour market, social protection, human rights, health and violence as the main areas
where public policies could support them6.
In 2011, the group up to 24 years old contained 78.5 million people, which corresponded with
40.2% of the whole population. In 2001, this segment consisted of almost half the population
(48.2%), which means its proportion in the total population is decreasing (Graphic 17).
6
To analyse education, IBGE uses the age boundaries related to study levels, being the group 0-5 correspondent to
kindergarten; 6-14, correspondent to primary and secondary school; 15-17, correspondent to high school; and 1824, correspondent to college.
To analyse the labour market, IBGE considers the age boundaries established by the 20 th constitutional amendment,
from 1998, that prohibits night works and danger works to anyone younger than 18 and any work to anyone younger
to 16 (except to those who are in a learner condition, who can be 14 or older).
23
Total
0-5 years
6-14 years
15-17 years
18-24 years
Graphic 17: Proportion of children, adolescents and young adults, according to age groups - Brazil - 2001/2011.
Source: IBGE, PNAD 2001/2011.
For the analysis of the living conditions of this group, it is necessary to take into account the family
context and the environment in which they have to support their growth and development. In
this sense, it’s alarming that people between 0-14 years old predominantly live in families with
lower incomes, with 60.8% of them living in the first two fifths of the distribution of household
income per capita. For the group between 15-24 years of age, the concentration in the first two
fifths of the distribution is lower (43.5%), but is still considered high (Graphic 18).
If we consider the multidimensionality of poverty, the first two-fifths of the income distribution
are associated with low levels of schooling (early dropout and years of schooling below the
national average) and poor sanitation (51.8% of urban households with income per capita up to
¼ minimum wage and 38.2% of those with more than ¼ to ½ minimum wage do not have
simultaneous access to sanitation and electric lighting), reaffirming the vulnerable situation
because of their low incomes.
This means that 60.8% of people aged 0 to 14 years and 43.5% of those between 15-24 years old
(mostly living in urban centres) live in inadequate housing and have routines marked by violence,
unemployment and spatial segregation. According to IPEA, 2 million young people between 15
and 29 live in slums.
24
0-14 years
1stquintile
15-24 years
2stquintil
e
3stquintil
e
4stquintil
e
5stquintil
e
Graphic 18: Percentage distribution of persons 0-24 years of age, by fifths of the monthly household income (per
capita) - Brazil - 2011. Source: IBGE, PNAD 2011.
Health and violence
One of the most serious facts related to the health of adolescents has to do violence and
accidents. According to the Map of Violence of 2012, murders of young people up to 19 years
increased by 376% since 1980, while the total number of homicides with victims of all age groups
went up 259%. In many cases, the authors of the deaths are police officers.
In 1980, the murders of children, adolescents and young adults accounted for 11% of total deaths
in Brazil. In 2010, this proportion rose to 43%, according to the data from the Ministry of Health.
In addition to the deaths, hospital admissions due to external causes are also high among young
people.
According to the Hospital Information System of SUS - SIH / SUS, in 2009, 12.9% of hospitalisations
of people younger than thirty was related to external causes.
25
For men between 10 and 19 years old, external causes are the primary reason for admission in
hospitals (25%). The same happens with the group of those between 20-29 years old.
Among hospitalisation for external causes of children, adolescents and young males between 1029 years old, 31.2% were due to falls, 20.3% of traffic accidents, 6.4%, the assaults, and 42.1% to
other external causes.
Rates of occupation of young people
The employment rate of people between 18-24 years of age increased slightly between 2001 and
2011, from 59.4% to 62.2%. At the same time, the proportion of people who only worked
decreased from 42.6% in 2001 to 47.8% in 2011, probably due to the heating of the economy in
the period.
Among those between 16 to 17 years old, the occupancy rate was 28.6% in 2011 (Graphic 19). At
this age, it is expected that young people are still attending school. Thus, only 59.5% of them
studied, whereas the other 20.0% worked and studied, and only 8.6% only worked. Compared
with 2001, the proportion of these young people who only studied (53.2%) increased, while the
proportions of those who worked and studied (24.6%) and those who only worked (10.5%)
decreased.
Brazil
North
Northeast
Southeast
South
Midwest
Graphic 19: Occupancy rate of persons by age groups, by Major Regions - Brazil - 2011. Source: IBGE, PNAD 2011.
Entrepreneurship among young people
Entrepreneurship has become popular in Brazil since the 90s, and contributed to the growth of
the share of the private sector in the economy. The country has been trying to support
entrepreneurial initiatives through the creation of supportive legislation, such as General Law of
Micro and Small Enterprise in 2007 and Microentrepreneur Single Act in 2008.
26
According to results of the Global Entrepreneurship Monitor, GEM Research 2012, the rate of
entrepreneurship in Brazil increased from 20.9% in 2002 to 30.2% in 2012, which means that
currently about 36 million Brazilians are initial or established entrepreneurs on the market. In
2010, more than half of these entrepreneurs (56.9%) were less than 35 years old. The country
follows the same trend of other nations, where most entrepreneurs tend to be young.
From 2008, young people aged 18 to 24 increased their share among Brazilian entrepreneurs. The
majority of entrepreneurs, however, are between 25 and 34 years (33.8%). Most initial
entrepreneurs have an education equivalent to a high school diploma.
Analysing Chart 6, it is found that typically, initial entrepreneurs have the following
characteristics: male, aged 25-34 years, with a college degree, and income range between 6-9
minimum wages. Among established entrepreneurs, one finds most men, aged between 45 and
54 years with incomplete primary education level and an income that ranges between 3 to 6 times
the minimum wage.
14.2% of the initial entrepreneurs are young people between 18 and 24 years. Among the
established entrepreneurs, the presence of this age group falls to 2.8%.
Chart 6: Specific rates of entrepreneurship established (TEE) according to demographic characteristics - Brazil and
regions.
______________________________________________________________________________________________
Demographic
Brazil
North
Northeast
Midwest
Southeast
South
characteristics
Rate (%)
Rate (%)
Rate (%)
Rate (%)
Rate (%)
Rate (%)
Gender
Male
17,4*
18,2
14,8
17,1
17,6
20,9
Female
13,1
12,9
12,0
12,6
13,8
13,3
Age group
18-24 years
2,8
4,0
1,5
2,6
2,6
5,5
25-34 years
11,2
10,4
8,9
11,1
12,8
11,7
35-44 years
20,6
22,4
19,6
18,9
20,6
22,4
45-54 years
23,9
26,3
23,5
23,6
23,3
25,3
55-64 years
21,3
29,4
21,0
24,3
20,1
21,4
Schooling
No formal education
18,5
21,1
17,9
16,6
20,0
15,2
Incomplete primary school
21,2
24,1
19,2
20,1
22,6
20,7
Primary school
20,6
16,8
22,0
17,7
20,8
20,8
High school incomplete
9,6
9,4
7,7
11,2
8,5
14,6
High school
13,3
15,3
10,5
12,3
14,2
15,4
Incomplete college
9,0
7,0
6,4
10,9
9,6
11,3
College
13,1
8,7
13,0
15,0
12,4
15,9
Postgraduate incomplete
19,4
12,5
14,5
11,4
25,1
15,2
Postgraduate degree
17,5
9,6
9,1
10,1
15,7
31,6
Income bracket
Less than 3 minimum wages
14,9
16,1
15,9
14,4
13,4
17,4
3-6 minimum wages
15,6
14,3
11,2
15,2
18,3
17,1
6-9 minimum wages
14,5
15,4
9,1
20,0
19,3
9,8
Over 9 minimum wages
14,0
22,6
9,5
10,4
10,8
18,6
27
Source: GEM Brazil 2012.
The increase in years of schooling of the population and the decreasing dropout rate have
rebounded on the rates of entrepreneurship, which indicates growth in the range of
entrepreneurs with higher education. Between 1995 and 1999, 64% of new entrepreneurs had at
least secondary education (up to 11 years of schooling). According to GEM, in 2012, that number
had increased to 76.1%.
It can be seen that as years of study increase, the rates of entrepreneurship among the
population goes up. Brazil has, therefore, promising prospects in this field, if it continues with the
policy of upgrading and expanding access to education.
2
Brazilian Megacities and Economic Opportunities for Young People
2.1
Sao Paulo
Metropolitan region of Sao Paulo
Composed by 39 municipalities, forming an area of 7947.28 km² (one thousandth of the Brazilian
surface), the Metropolitan Region of Sao Paulo (MRSP) is a major demographic and economic hub
of Brazil, responsible for 18.9% of the national GDP.
Large private capital is concentrated in MRSP with being host to the most important industrial,
commercial and financial complexes of the country. As a result, this region has a dense service
network, which requires a system of articulated movement and transport of goods, people and
information.
With about 19.7 million inhabitants of which 98% lives in urban areas, almost one in every 10
Brazilians lives in this metropolis. That’s a contingent of 72% more than the metropolitan area of
Rio de Janeiro, the second biggest in the country with 11.8 million inhabitants.
This enormous population approximately counts 1.55 million young people aged between 15 and
24 years, who are frequently seeking decent opportunities in the labour market.
Following, the main aspects of the characterization of MRSP will be presented, to discuss the
conditions in which young people live in this great global metropolis.
General data of MRSP
Economy
According to SEADE Foundation, the MRSP was responsible for 56% of the GDP of the state of Sao
Paulo.
28
The following chart shows the representative of MRSP’s GDP, when compared to the GDP of Sao
Paulo and Brazil.
(US$ in
billions)
Metropolitan area of Sao Paulo
State of Sao Paulo
Figure 2: Brazil, State of Sao Paulo and Sao Paulo Metropolitan Region Total Gross Domestic Product in 2004.
Source: EMPLASA, com dados do Instituto Brazileiro de Geografia e Estatística – IBGE.
Population:
Since the 1950s, the percentage of the rural population in Brazil is decreasing, and since the 1970s
Brazil has become a country with a predominantly urban population. Since the 2000s, the
percentage of urban population reached the level of 95,5%.
Brasil
--- Urban
--- Rural
Metropolitan area of São Paulo
--- Urban
--- Rural
Graphics 20/21: Brazil and Sao Paulo Metropolitan Region. Evolution of Urban and Rural Population: 1940 to
2000. Source: EMPLASA.
http://www.emplasa.sp.gov.br/emplasa/indicadores_metropolitanos_emplasa/indicadores_metropolitanos.asp Accessed: 20/04/2013
Besides the increase in life expectancy during recent decades and the increasing proportion of
adults in the Brazilian population, it is noted that the participation of young people between 16
and 24 years old in the pyramid of MRSP is still substantial. (see Graphic 22).
29
Another factor that stands out in the analysis of the pyramid is the rapid aging process of the
population. Note that the latest data, from 2006, shows the predominance of the age groups 5059 years.
These data for the Greater São Paulo, the country's largest metropolis, are in line with other major
cities in the country, other studies have demonstrated.
The questions that arise then are significant and relatively nascent in the country: are there
specific programs and public policies to attend these older layers of the economically active
population? Are cities providing appropriate opportunities and conditions to them?
Unfortunately, it appears that overall speaking; this is not yet the case.
30
Graphic 22: Metropolitan Region of Sao Paulo. Age pyramids: 1980, 1991, 2000 and 2006. Source: EMPLASA.
http://www.emplasa.sp.gov.br/emplasa/indicadores_metropolitanos_emplasa/indicadores_metropolitanos.asp Accessed: 20/04/2013
Education:
The illiteracy rate of the population over 15 years old decreased from 5,57% in 2000 to 3.6% in
2010. The population aged 18 to 24 with high school education increased from 43.27% in 2000 to
58.58% in 2010 (SEADE - Statistical Bulletin).
Education is an important factor in the labour market, since economic development increases
the demand for more educated workers. (DIEESE, 2011).
Employment and unemployment:
In the MRSP, there was a reduction of the unemployment rate, which dropped from 17.9% in the
biennium 2001-2002 to 12.8% in 2009-2010, due to the increase of job opportunities, which were
a result of increasingly favourable market conditions in the region. (DIEESE, 2011)
Young people in MRSP
The share of the population between 16 and 24 years old in the Working Age Population (PIA)7 of
MRSP decreased from 21.9% to 18.4% between 2000 and 2009, as shown in Graphic 23.
Regarding the Economically Active Population (EAP) 8 a more significant reduction from 26.4% to
22.0% is noticed for the group 16-19 years old (10.1% to 7.6%), as Graphic 23 shows.
Hereafter are presented some indicators extracted from a research done in 2011 by Ruth Cardoso
Center about the importance of young people in the labour market of MRSP.
30 years or more
25-29 years
16-24 years
7
Corresponds to people who’re older than 10 and live in MRSP.
8
Corresponds to the population in active age, employed or unemployed.
31
10-15 years
Graphic 23: Composition of the population in active age, by age - MRSP (2000-2009) (%). Source: Cadernos Ruth
Cardoso (2011, p.21).
16-24 years
16-19 years
20-24 years
Graphic 24: Evolution of the participation of young people in the labour force, by age - MRSP (2000-2009) (%).
Source: Cadernos Ruth Cardoso (2011, p.22).
30 years or more
25-29 years
16-24 years
10-15 years
Graphic 25: Composition of the Unemployed Working Age Population, by age group - MRSP (2000-2009) (%).
Source: Cadernos Ruth Cardoso (2011, p.23).
Indicators:

Schooling:
The proportion of occupied and studying young people fell from 27,7% to 24,7%, whereas the
proportion of those who only work rose from 47,6% to 50,8%.
32
PEA - Studies
PEA - Not study
Inactive
Graphic 26: Distribution of Working Population Economically Active Population (PEA) and inactive among
Population, aged 16 to 24 years - MRSP (2000-2009) (%). Source: Cadernos Ruth Cardoso (2011, p.23).
Regarding the PEA, school attendance among those who study and work decreased from 18.1%
in 2000 to 17.0% in 2009.
The proportion of those who just work increased from 35.9% to 39.0% during the same period.
Among the inactive, the proportion of those who are in school increased from 13.6% to 14.4% - a
result of increased inactive studying people aged 16 to 19, which rose from 25.4% to 29, 4%.
The unemployment rate among those attending school decreased from 34.5% to 31.2%. Among
those not attending, there was a small reduction, from 24.6% to 23.2%.
Study and work
Just work
Just study
Graphic 27: Distribution of Working Age Population by situation of regular employment and students, aged 16 to
24 years – MRSP (2000-2009) (%). Source: Cadernos Ruth Cardoso (2011, p.25).
33

Instruction level
In general, especially to young people, there was an elevation in schooling years according to
labour forces. However, the unemployment rates were more severe to those who didn’t invest in
more years of study.
According to DIEESE, schooling time in MRSP increased significantly, rising from an average of
eight years of study in 2001-2002 to 9.2 in 2009-2010, providing a more qualified labour supply
in the region.
Attends
Not attending
Graphic 28: Unemployment rates, by school attendance, among those aged 16 to 24 years old – MRSP (2000-2009)
(%). Source: Cadernos Ruth Cardoso (2011, p.26.
According to the Ruth Cardoso Center’s research (2011), higher educational levels increase
employability. However, the percentage of those who work and study among young people
decreased and vice versa - the percentage of those who do work and study increased.
The same study also states that the explanation for this phenomenon may be related to two
aspects: the two areas (work and study) got more rigorous and demanding, requiring greater
dedication; and an improvement of family life occurred, which incentivises study and later entry
into the labour market.
DIEESE (2011) points out that the level of instruction impacts more heavily on labour supply than
on labour demand, which can lead to the following scenario:
"This mismatch can cause major difficulties for occupational development for the more educated
and “deviation of function”, a situation that occurs when the employee performs a function below
their level of education. Under this hypothesis, there would be economic and social inefficiency,
to the extent that there would be an underutilization of the more educated labour force and
exclusion of those with fewer years of schooling "(DIEESE, 2011, p.56)
34
Incomplete elementary school
Elementary school/ high school incomplete
High school/ Incomplete higher
College
Graphic 29: Composition of the labour force aged 16 to 24, by level of Instructions – MRSP (2000-2009) (%). Source:
Cadernos Ruth Cardoso (2011, p.27.
The rate of participation of those with primary education complete/incomplete High School
education decreased from 70.7% to 63.0%; however, the unemployment rate, even though
constant, stayed around 35%.
For those who have completed high school/incomplete college education, the participation rate
rose from 83.1% to 85.4%, and the unemployment rate remained at around 21% between 2000
and 2009. For those with higher education, the participation rate is approximately 92%
throughout the whole period.
Incomplete elementary school
Elementary school/ high school incomplete
High school/ Incomplete higher
Graphic 30: Unemployment rate among youth aged 16 to 24 years – MRSP (2000-2009) (%). Source: Cadernos Ruth
Cardoso (2011, p.28).
35

Position in occupation
Between 2000 and 2009, the proportion of young workers with a formal contract increased from
46.1% to 59.9%, while employees without a formal contract increased from 26.4% to 22.8%. The
proportion of young people in the public sector remained stable, at around 3.5%.
Salaried with signed
Salaried unregistered
Young people in the public sector
Graphic 31: Distribution of workers by occupation in the main job, youngsters aged 16 to 24 years – MRSP (20002009) (in %). Source: Cadernos Ruth Cardoso (2011, p.29).

Sectors of Economic Activity
The distribution of young people among the sectors of economic activity in the MRSP shows that
the importance of the industry decreased, and the importance of the tertiary sector increased:
• The proportion of young people working in the industry decreased from 20.9% to 18.9%
between 2000 and 2009.
• In the construction industry, participation was almost stable at around 4.5% during the last
decade.
• Importance of trade increased, since it rose from 19.6% to 21.0% in total employment for this
age group.
• The service sector accounted for 52.2% of youth employment in 2009 (against 46.7% in 2000).
• The participation of domestic workers fell from 7.6% to 3.0% - which suggests considerable
improvement of female inclusion.
36
Industry
Building
Services
Trade
Household services
Graphic 32: Distribution of employed persons by industry of main job, youngsters aged 16 to 24 years – MRSP
(2000-2009) (in %). Source: Cadernos Ruth Cardoso (2011, p.31).
According to DIEESE, the fastest growing occupational category for the young people of MRSP
was the Support Category (12.9%) and the worst performance was observed in the executive
category, with a decrease of 2.2% (Chart 7).
Chart 7: Estimates of employed 16-25 years by occupational groups in MRSP - biennia 2001-2002 and 2009-2010.
______________________________________________________________________________________________
Specification
Biennium (in thousand people)
Variation
2001-2002 biennium
Occupied
Management and planning
Entrepreneurs, directors and
managers
Planning and organization
Execution
Skilled execution
Semiskilled execution
Unskilled execution
Support
Non-operational support
Office services
General services
Ill-defined
2009-2010 biennium
Absolute (thousand people)
Relative (%)
1.975
113
36
2.012
116
34
37
3
-2
1,9
2,7
-5,6
77
985
143
495
348
611
275
117
219
265
82
963
137
514
312
690
353
115
222
244
5
-22
-6
19
-36
79
78
-2
3
-21
6,5
-2,2
-4,2
3,8
-10,3
12,9
28,4
-1,7
1,4
-7,9
Source: DIEESE (2011, p.59).
Occupational groups of Support stand out among the most dynamic during the 2000s, which are,
for example: logistics, radio and telephone operators, transportation professionals (except
drivers), and public security professionals, with growth of 35.2%, and administrative assistants,
with 23.0%.
37

Time of employment in the main job
Young workers tend to stay shorter periods with the same company, declining between 2000 and
2009, and showing higher turnover of work, as follows:
• The proportion of young people worked up to 6 months for the same company increased from
36.4% to 37.8%, as well as those between 6 months and 1 year (passing from 18.6% to 22.3%)
and over 1 to 2 years (from 20.4% to 23.2%).
• The proportion of those who worked for 2-5 years decreased from 20.5% to 15%.
• The percentage of those who worked for more than 5 years fell from 4.1% to 1.8%.
Chart 8: Indicators for occupied 16-25 years people, according to the compatibility - MRSP - Biennium 2009-2010.
______________________________________________________________________________________________
Attributes
Level of compatibility
2009-2010 biennium
Overqualified
23
Average age of workers (in years)
Compatible
21
Underqualified
21
Overqualified
24
Time spent at work (in months)
Compatible
17
Underqualified
13
Overqualified
81,2
Proportion of those who contribute
Compatible
67,9
to Social Security (in %)
Underqualified
49,0
Overqualified
1.248
Average labor income (in RS nov/10)
Compatible
858
Undequalified
651
Source: DIEESE (2011, p.60).

Rate of employment9
While in the MRSP the unemployment rate fell from 17.6% to 13.8% in the period 2000-2009,
among those aged 16 to 24 years the decline was smaller, but still high, despite retreating from
28.2% to 25.8%.
The rate of women’s participation increased from 68.8% to 71.4% - indicating the higher interest
of young women in the labour market. Although the female unemployment rate declined from
32.4% to 29.9%, it is still much higher than the male rate.
9
The unemployment rate represents the number of people who are unemployed under the EAP, which represents
the amount of people that are unemployed and also those who are occupied.
Unemployment rate = (number of unemployed/ EAP) x 100
38
Total
16-24 years
Graphic 33: Unemployment rates, the total labour force and aged 16 to 24 years – MRSP (2000-2009) (in %).
Source: Cadernos Ruth Cardoso (2011, p.33) .

Means of survival of the unemployed
The information on the means of survival of young unemployed indicates that during the decade
(2000-2009) there were no structural changes - the proportion of young unemployed rose from
58.1% to 60.1%, indicating that the obtain of resources comes from another family member who
works.

Income
The average monthly income of employed people between 19 and 24 years old fell between 2000
and 2009 from R$ 828.00 to R$ 374.00, while the average salary in the MRSP fell from R$ 1,594.00
to R$ 1,274.00 .
Although declining, the average earnings of the young fell less: in 2000, the wages of young
people meant 51.9% of the average salary of MRSP, reaching 58.8% in 2009.
However, what caught the attention of the researchers were the salary disparities. Considering
only the year of 2009, it was observed:
• The average salary of men was of U$404.50, whereas the women’s reached U$340.50 (84,1%
of men’s salary).
• The average pay for non-blacks was U$ 401.00, while black people received U$ 330.50 (82% of
the wages of non-blacks).
• The wages of young people in the industry was U$ 403.00. In trade, the remuneration was U$
173.75.

Ethnicity
The transformations in the labour market in MRSP very much changed the situation of black
people and non-blacks. Firstly, the quantity of workers among the young black population is
higher than that among non-blacks - in the first case the age group 16 to 24 years was 24.1% of
the labour force in 2009, whereas in the second this proportion was 20.9%.
39
Although in 2009 the unemployment rate among young blacks was 28.7% versus 24.1% of nonblacks, the difference between these two rates decreased from 6.3% to 4.7% between 2000 and
2009.
Synthesis
Unemployment in the age group between 16 and 24 years is still impressive. But, on the other
hand, in the MRSP a decrease in informality was observed, what increased the percentage of
those who are registered workers. In this context, however, the turnover of young people in their
jobs is emphasized, as well as the decrease of the percentage of the population who work and
study at the same time.10
Even though young people are getting more educated in the labour market, the high
unemployment among the youth reveals the complexity of the barriers for young people to find
a job opportunity. The difficulty to find work for those who have more schooling also reflects the
gap between the growth of schooling rate in supply and the demand for workers.11
Even in a scenario of economic growth of the MRSP during the last years, with the decrease of
the unemployment rate, inserting young people in the labour market is still a big challenge.
The participation of young people in the composition of the metropolis’ labour force decreased –
what can happen due to the increase of schooling years and the late insertion in the labour market
– but the unemployed rate among people of this specific age increased.
However, those who work passed to study less. Among those who don’t work and don’t study,
the unemployment rate is much more severe. That indicates that, even with the qualitative
increase of the demand (young people with more years of study), the offer (market) also got more
exigent, probably asking for skills beyond those that are necessary for some specific function. This
may be a factor that contributes to the high turnover of young people in their jobs. Besides that,
nowadays the third sector of the economy absorbs more young people than the industrial sector,
which used to be the most absorbent.
In spite of the increase in the percentage of young people who are forms works, there was a fall,
economically speaking. And the fact that the disparities of gender and race persist is very
noticeable. Men still earn more than women, both among non-black people and black people.
However, it is more prevalent within the black population.
Therefore, it becomes visible that even in a favourable scenario, the MRSP is not as promising to
young people as it should be. The opportunities for young people in the current context could be
much better and bigger.
10
Cadernos Ruth Cardoso, 2011, p.37.
11
DIEESE, Qualificação e Mercado de Trabalho na RMSP, p.56.
40
2.2
Rio de Janeiro
Metropolitan Region of Rio de Janeiro (MRRJ)
After a long economic recession, the metropolis of Rio de Janeiro has regained economic
momentum with the return of public and private investments, in the big projects and
developments for the Word Cup, Olympic Games and pre-salt exploration.
The metropolitan region of Rio de Janeiro (MRRJ) – also known as Great Rio – is composed of 19
municipalities, which represent 12% of the area of the country (5292km²), and hosts 6 of the 10
municipalities that contribute most to the State of Rio de Janeiro’s GDP, respectively 59 per cent.
According to the CEPERJ Foundation, the metropolitan area concentrates the bank stock;
infrastructure; and workforce, which are located mostly in state industries, forming a diversified
industrial park. The MRRJ also brings together highly specialized services in the financial,
commercial, educational and health sectors, as well as public agencies and institutions.
With 72% of the country’s population, the MRRJ is also a space of social pressure marked by great
contradictions, the most prevalent of which are: the unequal distribution of urban facilities and
services; the increasing demand for dwelling marked by the expansion of slums; environmental
degradation and the persistent depletion of natural resources; public insecurity and high crime
rates.
The municipalities of Rio de Janeiro and Niteroi are those that offer the best conditions to attract
new government investment. Rio de Janeiro (which is the headquarter of the metropolis) is the
main centre for the production and marketing of goods and services throughout the state. Niterói
benefits from the proximity of Rio de Janeiro, especially after the construction of the Rio-Niterói
Bridge. These municipalities are also the best scorers in social indicators.
Lately, the city of Rio de Janeiro has seen industrial decentralization, with losses in productive
capacity and in the employment generation. Niterói has the highest HDI (Human Development
Index) of the whole state. At the same time, the city is absorbing a number of important industrial
investments in sectors related to the supply chain of oil and gas. The rededication of shipyards
stands out, with the reform and maintenance of platforms and offshore structures, besides the
construction of vessels for the transportation of passengers.
Other areas of the metropolitan region that should undergo significant changes in the coming
years are the socioeconomic and spatial areas covering the City of Itaboraí and its neighbours –
due to the deployment of the Petrochemical Complex of Rio de Janeiro - COMPERJ - and Itaguaí
and neighbourhoods, with the implementation of the Atlantic Steel Company - CSA.
Figure 3: Planned huge projects in the Metropolitan Region of Rio de Janeiro.
41
Source: Governo do Rio de Janeiro. Apresentaçao http://pt.scribd.com/doc/133892874/REGIAOMETROPOLITANA-DO-RIO-DE-JANEIRO-CARACTERISTICAS-E-OPORTUNIDADES#download
Economy
Specialists have seen loss of economic dynamism in the MRRJ for some decades now. While Sao
Paulo has developed a modern and dynamic industrial park, Rio remained with the traditional
sectors that were gradually becoming obsolete.
The importance of the third sector and the public sector grew, and in recent years we’ve seen the
development of the oil industry, with recent growth of production in the state.
In the MRRJ the service sector predominates, followed by the industrial sector, accounting for
71% of its GDP12, according to IPEA. The GDP of the Metropolitan Region of Rio de Janeiro in 2010
was 275 billion dollars13.
Population
In 2010, the population of the state of Rio de Janeiro reached 15.9 million inhabitants, of which
74.2%, i.e. about 11.8 million people (2010 Census), lives in the metropolitan region,
Despite the present trend of an aging population, the composition of the population of MRRJ
(Figure 4), is still significantly young with people predominantly in the range of 10 to 14 years,
12
http://www.ipea.gov.br/redeipea/images/pdfs/governanca_metropolitana/projeto_governanca_oficina1_rj.pdf
13
http://www.ceperj.rj.gov.br/ceep/GDP/GDP.html
42
and a significant presence in the range of 15 to 20 years, followed by the 21-24 years and 25-29
year olds..
There is a reduction in the rate of population growth in MRRJ during recent decades, declining
from 1.18% (1991/2000) to 0.90% (2000/2010), and expected to decrease further during the
period 2010/2020, as shown in Chart 9.
Metropolitan area
Capital
Metropolitan area without capital
State of Rio de Janeiro
RMRJ
Rest of state
Figure 4: Relation between the population and the MRRJ State of Rio de Janeiro. Source: Governo do Rio de
Janeiro. http://pt.scribd.com/doc/133892874/REGIAO-METROPOLITANA-DO-RIO-DE-JANEIRO-CARACTERISTICAS-EOPORTUNIDADES#download.
However, the slowdown in the rate of growth is not as strong in the periphery, as shown in Figure
4, referring to the periphery of cities MRRJ.The above Chart shows that the growth rate in
periphery for the same period (2000/2010) is 60% (Itaboraí) to 346% (Marica) higher than the
growth rate calculated for the MRRJ.
Chart 9: Rate of Growth Metropolitan Region and the Municipality of Rio de Janeiro, in percentage.
%/year
1991/2000
2000/2010
2010/2020
City of Rio de Janeiro
0,75%
0,80%
0,50%
Metropolitan area
1,18%
0,90%
0,50%
Source: Governo do Estado do Rio de Janeiro
Human Development Index
43
Regarding human development indicators, an improvement is seen between 1991 and 2000, with
increased life expectancy, lowered infant mortality and illiteracy, an increase in average
education and average income. These improvements are reflected in the HDI income, longevity
and education.
Chart 10: Human Development Indicators of MRRJ
______________________________________________________________________________________________
1991
2000
Variation
Index
Rank
Life expectancy (in years)
66,48
Infant mortality (per thousand live births)
29,56
Children 10-14 years attending school (%)
88,52
Illiteracy of children 10-14 (%)
11,87
Average schooling (Over 25)
6,79
Illiteracy of people aged 25 years or more (%)
9,25
Average income
345,39
Gini coefficient
0,607
Percentage of indigenous
7,60
Percentage of poor
22,12
HDI
0,76
HDI Income
0,75
HDI Longevity
0,69
HDI Education
0,85
18
15
15
11
2
22
7
7
11
12
9
7
18
6
Index
69,51
21,60
96,10
6,75
7,61
6,34
452,61
0,619
7,79
17,94
0,82
0,79
0,74
0,91
Rank
20
10
16
8
2
19
6
9
10
11
11
6
20
9
%
4,55
-26,91
8,57
-43,17
12,08
-31,44
31,04
1,94
2,43
-18,89
6,75
6,03
7,30
6,95
Source:http://www.iets.org.br/biblioteca/Desenvolvimento_da_Regiao_Metropolitana_do_Rio_de_Janeiro.pdf
Education
According to SEBREA-RJ, following its research into the profile of workers of micro enterprises,
there has been an increasing level of schooling over time. Graphic 34 shows the decrease of the
participation of workers with low education and a significant increase of workers with 11 or more
years of study, from 36% in 2003 to almost 50% in 2011.
Most people employed in micro enterprises are 40 years of age or older. Following the movement
of the labour force, the workforce in microenterprises is aging, since there is a considerable
decrease in the participation of age groups up to 29 years. (SEBRAE, 2012, p.42)
44
Uneducated and less
than 1 year of study
1-3 years of study
4-7 years of study
8-10 years of study
11 or more years of
study
Graphic 34: Participation of population employed in microenterprises by levels of schooling in MRRJ
(2003/2010/2011). Source: SEBRAE (2012, p.42)
0-24 years
25-29 years
30-39 years
40-49 years
50-64 years
Over 65
Graphic 35: Participation of the population engaged in microenterprises by age group in MRRJ (2003/2010/2011).
Source: SEBRAE (2012, p.42)
Employment and unemployment:
The Chart below represents the employment trend between 1980 and 2003, showing the gradual
increase of the unemployment rate. Over this period, the service sector has absorbed most of the
Economically Active Population (EAP), followed in 2003 by the commercial and industrial sectors.
The number of registered workers decreased, so did the number of employers. In contrast, the
number of unregistered workers and own-account workers increased.
In general, there is a loss of average income in the construction industry and commerce, as
opposed to relative growth in the service sector and industry. Furthermore, both employees (with
and without portfolio) and the self-employed saw a decrease in their income.
Chart 11: Labour Market Conditions in Metropolitan Region of Rio de Janeiro
_____________________________________________________________________________________________
1980
1990
45
1992
2001
2003
Population (in millions)
Participation rate
PEA (in millions)
Unemployment rate (%)
Total employed (in millions)
Distribution of occupied
By sector
Agriculture
Industry
Building
Services
Trade
Government
By occupation
Employer
Employee with signed
Employee unregistered
Self-employed
Official
Unpaid
Average real incomes
Total employed
By sector
Agriculture
Industry
Building
Services
Trade
Government
By occupation
Employer
Employee with signed
Employee unregistered
Self-employed
Official
6,4
57,5
3,7
6,8
3,4
8,2
60,1
4,9
4,4
4,7
7,2
59,7
4,3
7,0
4,0
8,4
61,0
5,1
12,5
4,5
8,3
60,4
5,0
13,8
4,3
1,6
18,1
9,2
50,1
13,2
7,8
1,4
15,9
6,6
53,9
15,5
6,6
2,0
13,4
7,6
54,8
15,3
6,8
1,0
9,5
7,4
58,3
17,5
6,3
0,9
10,5
8,1
53,5
19,6
6,7
3,8
57,2
13,9
17,1
7,3
0,7
4,3
52,3
15,5
20,2
6,9
0,7
4,2
45,0
18,4
19,2
11,1
2,1
4,1
41,6
20,2
23,4
9,2
1,6
3,6
40,7
19,6
21,8
13,3
0,9
993
780
747
865
863
769
1172
720
979
812
1358
512
817
738
726
743
1331
599
785
521
719
734
1134
953
823
664
839
804
1529
1461
853
579
881
670
1578
2622
766
405
604
1214
1929
815
353
608
1080
2819
814
514
780
1469
2622
799
480
725
1437
2784
1098
430
616
1289
Source:http://www.iets.org.br/biblioteca/Desenvolvimento_da_Regiao_Metropolitana_do_Rio_de_Janeiro.pdf
However, according to a study of SEBRAE-RJ14, since the mid-2000s there has been significant
improvement, reflected in the decrease of the unemployment rate and increase of formalization,
with income growth, especially after investments resulting from the World Cup, Olympics and
discovery of pre-salt.
The challenge is how to seize new opportunities and increase the potential of the region,
especially in industrial development: chain steel, shipbuilding, logistics, petrochemical/chemical,
14
SEBRAE/RJ Service of Support to the Micro and Small Firms of the State of Rio de Janeiro – “the turning point and
its effects on the labour marker of Rio de Janeiro” - - boletim QUADRIMESTRAL | JANEIRO 2012.
46
real estate/construction, mass consumption (food, clothing, furniture) and tourism, which the
government estimates that has the potential to generate 800,000 new formal jobs (Graphic 36)
Formal jobs (in thousand)
Estimated growth rate: 6% per annum
Growth rate 2000/2009: 5,6% per annum (REAIS)
Graphic 36: Perspective generation of formal jobs in MRRJ. Source: Governo do Rio de Janeiro.
http://pt.scribd.com/doc/133892874/REGIAO-METROPOLITANA-DO-RIO-DE-JANEIRO-CARACTERISTICAS-EOPORTUNIDADES#download.
The Government's proposal is to generate new centres to counter the dominance of the city of
Rio de Janeiro that polarizes currently 75% of jobs in the metropolitan region.
Compared to other metropolitan areas between 2003 and 2011, the metropolis of Rio de Janeiro
stood out with the highest growth rate, reaching heights of Sao Paulo.
Even so, Rio continues with high informality and although the income and qualifications
employers are increasing, the proportion of people undertaking is decreasing (SEBRAE, 2012, p.
7).
Public security:
Another factor that stands out in Rio de Janeiro, as in other Brazilian cities (São Paulo, Belo
Horizonte, etc.) is the urban violence linked to the lack of employment and influence of traffic,
resulting in social and economic losses.
Graphic 37 shows that, between 1998 and 2001, the homicide rates were decreasing in the MRRJ,
with slight rise between 2001 and 2002, entering again a decreasing process until the end of the
period (2007).
47
Rate per 100.000 inhabitants
Total homicides
Homicides in men
Homicides in women
Homicides among youths 15 to 24 years
Homicides among youths 15 to 29 years
Graphic 37: Homicide rates Metropolitan Region of Rio de Janeiro per 100 thousand inhabitants, from 1998 to
2007. Source: Diniz, Lacerda e Horsth (2010, p.7).
http://www.cchla.ufrn.br/seminariogovernanca/cdrom/ST4_Alexandre_Elisangela_Gilmara.pdf
The Graphic also shows that the rates of death among young people aged between 15 and 24
years and 15 and 29 are superior to those presented by the total population. The lowest rates
corresponded to homicides among women, prevailing homicides among men.
The Government has adopted as a social action of public security the deployment of Pacifying
Police Units (UPP). According to the Government, the UPP consists of a new model of public
security and policing which promotes closer relations between the population and the police,
together with the strengthening of social policies in the community, retrieving and integrating
socially the territories that were occupied for decades by traffickers. There are currently running
32 UPPs, benefiting 1.5 million people15.
The role of the insertion of the UPPs is to reclaim territories previously dominated by drug
trafficking and violence. In these territories, the young, mostly inactive, who are those that
neither study nor work, or do not participate the school system or production system, were
targets of organized crime and the economy of trafficking. After installation of the UPPs are
initiated literacy, sport, leisure and culture activities, focused on children and youth.
15
The government has the goal of reaching 40 UPPs until 2014. . (Source: http://www.upprj.com/)
48
Figure 5 : Urbanized slum under the Pacifying Police Units program (UPP). Source:
http://fernandonogueiracosta.wordpress.com/2011/01/05/micronegocios-emergem-nas
The police action after the pacification is the subject of much discussion in various fields, that
question whether the change meant not only changing the "owner of the hill", due to the existing
parcel of the Civil Police of Rio de Janeiro (also from other cities) linked to corruption and violence.
In general, the results of the integration of UPPs show up positive, and to demonstrate that it
would be necessary an approach that is not part of this research.
In this universe, data shows the situation of young people in the metropolis of Rio de Janeiro
between 1991 and 2003. Then the cut turns to the communities with UPP to analyse the recent
situation of young people from the slums of Rio de Janeiro.
Young people in the MRRJ
The general characteristics of the labour market in the MRRJ during the 1990s followed the
national trends, such as the maintenance of relatively high unemployment rate and growth of
informal work (self-employed professionals or unregistered workers).
Chart 12 shows the situation of young people (15-24 years) in the labour market in the MRRJ
between the years 1991 and 2000. It is noticed that there was a reduction of 11.1% of young
people in the PEA, and Machado (2001) states that this change has a positive side and may be
linked to the reduction of introduction of young people (especially those younger than 15 to 17
years ) in the labour market, possibly accompanied by increased years of schooling. However, if
some young people left the productive participation, those who stayed didn’t satisfactory
49
conditions, because the occupancy level declined 14.7% and the unemployment rate among
young people rose by 3.7%.
Chart 12: Stats Youth (15-24 years) in the Labour Market – MRRJ (1991/2000)
______________________________________________________________________________________________
1991
2000
Variation
Working-age population (PIA)
1.740.479
1.861.364
6,9
Economically active population (PEA)
899.594
800.147
-11,1
Participation Rate (%)
51,7
43,0
-8,7
Occupancy level
827.483
705.655
-14,7
Total Unemployed
71.782
93.782
30,6
Unemployment Rate (%)
8,0
11,7
3,7
Source: Machado (2001, p.5)
Regarding the occupation of young people in 1999, Chart 5 shows that they were placed in a
precarious labour market, with about 50% of young unregistered workers aged 15 to 17. It also
calls attention the number of young domestic workers without portfolio, consisting of youth
placed in family environment that is not theirs, servicing, cleaning, cooking, etc..
Young people living in slums are more vulnerable to difficulties in the labour market and in school,
and are less able to access opportunities. Chart 6 shows that the percentage of youth aged (1524 years) was 25.3% of Working Age Population, a higher percentage than the MRRJ in the same
period, which was 20%.
Chart 13 shows that the range between 18 and 19 years old has the highest unemployment rate
(23.9%) and has a participation rate of 50.5%, a percentage that rises to 71% among young people
20-24 years.
Chart 13: Composition of Occupation by Age Group – MRRJ/1999.
______________________________________________________________________________________________
Age group
Total
15-17
18-19
20-24
Over 26
Total
100,0
100,0
100,0
100,0
100,0
Employee with signed
39,6
25,4
33,5
47,9
38,9
Military
2,0
7,4
5,0
1,4
Official statutory
8,0
1,7
2,8
9,2
Other employee unregistered
12,5
43,0
28,5
19,0
10,3
Employees without formal declaration
0,1
0,1
Domestic worker with signed
3,1
1,4
2,9
2,9
3,2
Domestic worker unregistered
6,3
7,0
7,4
5,6
6,4
Domestic worker without formal declaration
0,0
0,0
Self-employed
23,7
16,2
15,7
14,1
25,5
Work in prodution for own consumption
0,1
0,4
0,2
Work in construction for own use
0,1
0,1
Unpaid worker
0,8
6,3
1,7
1,7
0,5
Source: Machado (2001, p.7)
50
Chart 14: Composition of the Working Age Population by Age Group in the slums in 1999
______________________________________________________________________________________________
Age group
Favelas (%)
10-14
12,7
15-17
8,2
18-19
5,2
20-14
11,8
Over 25
62,0
NR
0,0
Total
100,0
Total of young (15-24 years)
25,3
Source: Machado (2001, p.8)
Chart 15: General Data Labour Market by Age in Low Income Communities
______________________________________________________________________________________________
AGE GROUP
PIA
15-17
16.368
18-19
10.494
20-14
23.727
Over 25
124.251
NR
Total
254.613
Total of young (15-24 years)
50.589
Source: Machado (2001, p.9)
PEA
OCCUPIED
UNEMPLOYED
3.660
5.304
16.766
78.595
3.079
4.037
13.827
70.851
581
1.267
2.939
7.744
PARTICIPATION RATE
22,4
50,5
70,7
63,3
UNEMPLOYED RATE
15,9
23,9
17,5
9,9
107.854
25.703
95.292
20.943
12.562
4.787
42,4
50,9
11,6
18,6
The data show that the situation of young people in the low-income community is more critical
than the situation found across the board in the Metropolitan Region. This young people have
fewer years of education (with lower quality) and more difficulties to acquire specific knowledge
(computer, language, etc.), resulting in lower chances of competitiveness in the labour market.
The recent fieldwork IETS, conducted in partnership with FIRJAN slums with Pacifying Police Units,
shows that a significant number of young people between 15 and 24 years old do not work or
study, and "it’d still exist in the slums, until recently dominated by trafficking or militia, a great
number of young people who would be neither studying nor working "(SEBRAE, 2012, p.22).
The study of the IETS with FIRJAN aimed to draw the socioeconomic profile of slums16 covered
by the UPP, elaborating a diagnosis of the demands and needs of the communities. The study
mentioned issues related to demography, infrastructure, income, work, education, health and
culture. The results can be checked below:
16
The study contemplated nine slums with UPPs: Babilonia, Batam, Cantagalo, Champéu Mangueira, Cidade de Deus,
Ladeira dos Tabajaras, Pavao-pavaozinho, Providência, Santa Marta. It was later supplemented by further 7: Andaraí,
Borel, Formiga, Macacos, Salgueiro, Sao Joao / Matriz-Quieto, Turano. The presented data correspond to the
universes of the first 9 slums with UPPs, since the data are less summarized.
51
Average per capita income of the favelas
with UPP (Pacifying Police Unit): U$ 315
Graphic 38: Per capita income in the slums with UPP. Source: IETS (2010, p.4)

Poverty and income:
The per capita household income of slums with UPP is U$ 315, and sharply below average in the
Metropolitan Region of Rio de Janeiro.

Indicators of Labour market
The research shows that despite the fact that the slum is a space marked by informality, formal
work prevails. This does not mean higher salaries; on the contrary, the common type of jobs in
slums is low-income jobs. This fact must consider that the participation of employers, by their
own, and officials / military in MRRJ are higher than that found in the slums.
52
Chart 16: Indicators of labour market at UPP slums program
______________________________________________________________________________________________
Indicators
Cidade Ladeira dos Cantagalo Providência Batam Pavão
Santa Chapéu
Babilônia
de Deus Tabajaras
Pavãozinho Marta Mangueira
Working-age
Population (PIA) 80,1%
84,6%
80,7%
80,5%
79,1%
80,0%
84,0%
86,9%
81,1%
Economically
Active
57,9%
Population (PEA)
63,3%
60,0%
50,4%
56,7%
64,7%
65,1%
65,1%
69,2%
Occupied
92,2%
90,4%
91,6%
89,5%
80,3%
95,0%
92,0%
95,4%
91,8%
Unemployed
7,8%
9,6%
8,4%
10,5%
19,7%
5,0%
8,0%
4,6%
8,2%
Not economically
active
4,1%
population
36,7%
40,0%
49,1%
42,2%
34,0%
33,9%
33,7%
26,6%
Source: IETS (2010, p.7)
53
Chart 17: Indicators position in occupation at UPP slums program
______________________________________________________________________________________________
Indicators
Cidade Ladeira dos Cantagalo Providência Batam Pavão
Santa Chapéu
Babilônia
de Deus Tabajaras
Pavãozinho Marta Mangueira
Employee with
signed
49,0
59,3
58,9
61,2
50,8
64,1
64,7
43,8
48,4
Employee
unregistered
Domestic
worker with
signed
Domestic
worker
unregistered
15,6
20,2
18,2
16,7
22,4
13,4
17,0
23,4
22,2
0,7
2,4
1,7
1,0
1,4
1,9
1,7
1,3
2,7
1,9
2,2
1,8
1,4
0,3
1,6
2,3
5,5
5,4
Official and
military
2,0
0,5
2,0
0,9
2,2
0,1
0,9
2,6
3,2
Own bank
account
13,8
7,7
12,6
14,4
18,2
13,2
10,8
20,4
15,8
Employer
0,8
0,0
0,5
0,0
0,3
0,2
0,2
0,4
0,0
Ill-defined
16,3
7,6
4,4
4,5
4,5
5,4
2,4
2,6
2,3
Source: IETS (2010, p.7)

Occupation of young people of age 15-24:
Nearly half of young people aged 15 to 24 of communities is not in school, being the most critical
situation in the participation of young people who do not study and don’t work either.
Despite the recent boosting of economy in the MRRJ, data of PME / IBGE of 2010 show that the
percentage of young people between 18 and 24 years of age who do not work and aren’t seeking
employment was 40.4%, compared to 22.1 % in MRSP. (SEBRAE, 2012, p.22)
54
7-14 years
0-6 years
15-18 years
Graphic 39: Percentage of children and young people who attend school. Source: IETS (2010, p.9)
Chart 18: Occupation of young people (15 to 24 years old)
______________________________________________________________________________________________
Indicators
Cidade Ladeira dos Cantagalo Providência Batam Pavão
Santa Chapéu
Babilônia
de Deus Tabajaras
Pavãozinho Marta Mangueira
Level
occupied
Unemployment
rate
School-Work (%)
50,6
55,7
40,8
40,6
33,9
59,2
55,1
57,1
50,0
8,6
10,5
9,7
8,1
19,5
4,3
9,1
16,9
5,4
Just study
29,9
28,7
34,6
32,3
30,8
20,3
25,9
22,5
32,4
Study and
work
18,5
15,6
13,5
13,8
5,3
10,3
19,6
15,0
13,5
Just work
32,0
40,0
27,3
26,4
27,4
48,2
35,0
40,0
36,5
Not study and 19,5
Not work
Labor
Income (R$)
596,2
R$ 1 = U$ 0,57 (2010)
Day of
employment
41,0
(hours per week)
15,7
24,6
27,5
36,5
21,2
19,6
22,5
17,6
638,1
527,5
670,0
667,7
894,1
599,3
530,4
524,0
39,8
38,6
42,3
43,6
47,3
42,9
42,6
46,2
55
Source: IETS (2010, p.9)
Synthesis:
Understanding the situation of young people in the current context is important because of the
economic and social role they play. According to Machado (2001), "in the purely economic side,
they represent the future workforce, and therefore the potential capability of our country. On
the social side [...] they are the main agents of change, able to more easily incorporate new ideas
and change the course of society. "
It is important to develop public policies that enable young people to have better life prospects,
motivations, job opportunities and improvements of educational standards, especially in
underserved areas of the metropolis. (SEBRAE, 2012, p.22).
The pacified slums show up as a great opportunity for new business and formalization of
enterprises that have existed informally, but were hidden by the traffic. Public policies for the
inclusion of youth in the labour market should be alert to new opportunities that are presented,
mainly because of the large companies that are beginning to turn their attention to the provision
of services in these areas before marked by informality. They are companies in the area of
telecommunication, cosmetics, and petrochemicals, among others, which can contribute to
improving the training of young people.
The insertion of sports activities, education and culture promoted by the UPPs can help preparing
young people for the demands of communities and new opportunities that are presented, within
this context, as supportive for the economic recovery in Rio de Janeiro, whose attention will be
globally focused during the coming years.
2.3
Informal Territories in Reinvention: Spatial Externalities and Intangible Attributes
Emerging on the Borders
According to a recent article published by Columbia professor Saskia Sassen, not just the influence
of cities will eclipse the power of nation-states in this century, but also we are facing the “seeds
of an urban geopolitics and much of it is informal”: the rise of these new vectors would include in
a short list of just seven urban emerging vectors, the region of Sao Paulo-Rio de Janeiro.17
As we have seen here, Sao Paulo, with almost 20 million people in its metropolitan region,
emerged into a “megacity emergent power” in recent years as the locomotive of the new Brazil,
6th largest economy in the world. In Rio de Janeiro, there is an impressive “Phoenix phenomenon”
of urban reinvention in course in the city since 2010: huge urban infrastructure works all over the
17
Saskia Sassen dominant urban vectors: 1. Washington/New York/Chicago; 2. Beijing/Hong Kong/Shanghai; 3.
Berlin/Frankfurt/Brussels; 4. Istanbul/Ankara: Istanbul; 5. Sao Paulo/Rio de Janeiro/Brasilia; 6. Cairo/Beirut/Riad; 7.
Geneva/Vienna/Nairobi. From: Sassen, Saskia, Ephemeral Kingdoms, Eternal Cities in The European, 11.03.2013.
56
city; favelas being pacified and urbanized; economic and political power finally being recovered
after decades of decay and loosing power to Sao Paulo; the city receiving two major international
events – World Soccer Cup in 2014 and Olympic Games in 2016; the emergence of an impressive
recovered citizenship pride and happiness with the city.
But what is appearing behind and besides this headlines-curtain in the city scene of these two
megacities?
What is happening in the concrete community stage of common people in these cities?
Hybrid territories urban reinvention.
There is an urban reinvention and social innovation process through people in this emerging cities
hybrid territories.
In many cities around the globe this century we are seeing the reflection on the territory of the
end of the fordist era – cities built through huge infrastructures and for cars, without urbanity
(local urban dimension). The recent transformations on the urban territory are based on strong
demands by “urbanoids”, urban citizens reinventing places everywhere for people to meet,
interact, share, innovate.
Facing the challenge of ally master strategic plans and construction of huge infrastructures for
the city with tactics of macro-micro infiltration, there’s an emergence of construction of urbanity,
building tactics of appropriation of local dimension.
Cities for people. Reinvented by people. In dense non-formal cities. Creating something new in
between formal and informal realities. Hybrid territories.
A common solution for those “out-of-the-box” city strategies is the growing role of civil society
and new forms of governance, especially Triple Helix actions (universities plus businesses plus
government), or projects which are led by the society or the private sector and politically
sponsored by the local government.
Besides this strategy, which we could see in many cities around the world nowadays, the basic
particularity here in Sao Paulo and Rio de Janeiro is a less formal process of bottom-up creative
and innovative situations in these cities territories.
Sao Paulo and Rio de Janeiro are showing us new forms of urban reinventions, inventively
connecting formal and informal, creating in between situations, non-orthodox programs.
Emerges a contagious power of reinvention in these large urban clusters. People and cities that
are being rediscovered in a creative and innovative way, rebuilding their destiny after periods of
decline and generating hybrid situations contaminated by old pre-existing conditions and the
emergencies of the new: opportunities, programs, events, people.
Edward Glaeser, urban economist, puts people skills, small entrepreneurships and strong
connections environment and education as the basic attributes for cities reinvention in the 21 rst
57
Century.18 He also mapped innovation appearing in the favelas of Rio de Janeiro and Mumbay.
Certainly not the same innovation that has been created in Silicon Valley, for instance. Brazilian
megacities has upgraded social inclusion including access to education for the people in informal
territories, but that educational environment is far way from Northern California Universities. The
common point is not this but all others attributes and probably some intangible attributes
presented on that hybrid dense emerging territory.
A new urban ecosystem: liquid clusters in hybrid territories in reinvention process conducted by
young local community people and showing to the entire society new possibilities of
opportunities in emerging megacities this century (following Figures)19.
18
Glaeser, 2012.
19
Most of cases and images from Heliopolis slum in Sao Paulo, captured from our Research Group: Smart Informal
Territories lab (coordinator: professor Carlos Leite, Mackenzie Presbyterian University).
58
59
60
3
Conclusions
The are good news from macroeconomics and social inclusion
Brazil emerged into the world scenario in the recent years as the emerging giant from Latin
America. GDP has put the country as the 7th largest economy in the world. With the World’s 5th
largest population of 193 Million, more than 85% lives in cities. Investments in the country are
huge.
International large events will occur in the Country in the next future: Soccer World Games in
2014 and Olympic Games in Rio de Janeiro in 2016.
Urbanization process in the country shows a better well-balanced distribution of urban
development (now we have 13 strong metropolises instead of just two huge megalopolis – Sao
Paulo and Rio – although these two megacities together still represent a lot (population, GDP
and opportunities).
From 2002 to 2010, poverty in Brazil fell 50.64%, the income of the poorest 50% grew by
67.93% and despite being very striking in Brazil, inequalities have shown a downward trend. The
Gini coefficient also registered a significant decline in recent years, from 0,559 in 2004 to 0,508
in 2011.
Despite the existing challenge to be faced, there is an increasing on the degree of formal jobs;
an increasing on the better education/more formalization relationship and an increased equality
between men and women jobs opportunities.
The employment rate of people 18-24 years of age increased slightly between 2001 and 2011,
from 59.4% to 62.2%. the rate of entrepreneurship in Brazil increased from 20.9% in 2002 to
30.2% in 2012, which means that currently about 36 million Brazilians are initial entrepreneurs
or established on the market. In 2010, more than half of these entrepreneurs (56.9%) had less
than 35 years old. The country follows the same trend of other nations, where entrepreneurs
are mostly young.
Informal territories: innovation and reinvention are appearing on the largest urbanized slums of
Sao Paulo and Rio de Janeiro, mainly. Informal economy and entrepreneurship are strong, as well
as creative practices and bottom-up initiatives. The impressive urbanity is providing a collective
intelligence inside these "liquid environments", with new forms of clusters led essentially by local
young community.
The pacified slums in Rio de Janeiro (UPPs), e.g., show up as a great opportunity for new business
and formalization of enterprises that have existed informally, but were hidden by the traffic.
Public policies for the inclusion of youth in the labour market should be alert to new opportunities
that are presented, mainly because of the large companies that are beginning to turn their
attention to the provision of services in these areas before marked by informality. They are
companies in the area of telecommunication, cosmetics, and petrochemicals, among others,
which can contribute to improving the training of young people, as well as the insertion of sports
activities, education and culture promoted inside the UPPs.
61
But not so good for the young people and not good for the cities
However, the numbers show that it’s long way to change substantially the Brazilian inequality
scenario in the ownership of the total income, since the richest 20% still hold 57.7% of revenue,
in contrast to just over 11% held by the poorest 40%.
60.8% of people aged 0 to 14 years and 43.5% of 15-24 years old (mostly living in urban centres)
live in inadequate housing and have routines marked by violence, unemployment and spatial
segregation. 2 million young people between 15 and 29 live in slums.
In 2011 8.5% of the population (16.3 million people) lived in extreme poverty situation. Of this
quota, 4.8 million have household monthly nominal income equal to zero, and 11.4 million have
income between U$ 0.60 and U$ 41.92.
inserting young people in the labour market is still a big challenge. Even though young people are
getting more educated in the labour market, the high unemployment among the youth reveals
the complexity of the barriers for young people to find a job opportunity. Even with the qualitative
increase of the demand (young people with more years of study), the offer (market) also got more
exigent, probably asking for skills. Besides that, nowadays the third sector of the economy
absorbs more young people than the industrial sector, which was very representative in the past.
Why it is not enough?
Because of the historical gaps on the long-term fundamental issues. Brazil has to face some of its
biggest issues such as better development of:
Education: research shows some advance in quantity but not in quality; also shows a focus on
graduation and not on elementary/basic school.
Regional infrastructure: highways, railways, airports and ports).
City infrastructure and management: urban mobility, urban security and social inclusion, public
equipment, strong public policies on urban development (ordering the territory growth).
Deficiency in education limits opportunities for young people, which fall in the informal economy
receiving low wages and having excessive working hours.
It is important to develop better and more public policies that, specifically, enable young people
to have better life prospects, motivations, job opportunities and improvements of educational
standards, especially in underserved areas of the metropolis outside of Sao Paulo and Rio de
Janeiro.
The country needs urgently to face the huge problem of an historic, endemic and growing
corruption in the society, particularly on all levels of Governments and politics.
4
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