Inflation and economic policy reform : social implications in Brazil

Abstract

This paper analyzes the social implications of inflation and economic policy reform in Brazil, focusing on labor market dynamics and income inequality. It argues that chronic inflation, driven by unresolved societal conflicts, has led to increased wage and price dispersion, discouraging formal employment and exacerbating inequality. The Brazilian labor market, despite its high job creation capacity, suffers from poor job quality, high turnover, and a growing informal sector. Institutional factors such as labor laws, unemployment insurance, and wage policies contribute to short-term employment relationships and hinder productivity growth. The authors conclude that economic stabilization alone is insufficient; labor market reforms are essential to improve employment quality and reduce inequality.