July 28, 20 - 12:10 pm - LABS

For Ibre/FGV researcher, emergency aid reduced extreme poverty to the lowest level in 40 years in Brazil

In June, almost half (43%) of the Brazilian households received the COVID-19 emergency aid. With this, the proportion of people living below the extreme poverty line has never been lower in at least 40 years in the country, reported the newspaper Valor Econômico.

This is the conclusion of a researcher from the Brazilian Institute of Economics of the Getulio Vargas Foundation (Ibre/FGV, in the acronym in Portuguese), using as a basis the Pnad Covid, a special survey from the Brazilian Institute of Geography and Statistics (IBGE) that monitors the impacts of the pandemic on the Brazilian labor market.

The end of the benefit in this second semester tends to reverse this result and throw millions of people back into poverty.

According to Daniel Duque, the researcher responsible for the calculations, 3.3% of the Brazilian population (that is 6.9 million people) lived in June with a per capita household income of $1.90 per day – or BRL 154 per month per member of the families. He told the newspaper that the emergency aid has a strong impact on extreme poverty due to its coverage and high value (BRL 600 per month, or something around $115,5).

Brazilian currency
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A month earlier, in May, this proportion was higher: 4.2%, the equivalent to 8.8 million people. As pointed out by Valor Econômico, other IBGE surveys – with different methodologies and, therefore, comparative limitations – suggest that misery has been at its lowest level since, at least, the early 1980s. The best time so far had been in 2014, when it was 4.2%, the same proportion as in May this year.

The emergency aid was created in April to help self-employed workers, individual microentrepreneurs (known for the acronym MEIs in the country), and the unemployed during the crisis generated by the new coronavirus pandemic. Initially, three payments of BRL 600 were made. In early July, the government extended the benefit for two more months.