Strengthening Income Stabilization Through Social Protection in Emerging and Developing Economies

Download or read book Strengthening Income Stabilization Through Social Protection in Emerging and Developing Economies written by Fernanda Brollo and published by International Monetary Fund. This book was released on 2024-03-08 with total page 27 pages. Available in PDF, EPUB and Kindle. Book excerpt: Social protection programs are crucial for stabilizing household income, especially during crises. Brazil's response to the pandemic, the Auxilio Emergencial (AE) program, demonstrated the value of a resilient social safety net and digital tools. This study assesses AE's effectiveness in income stabilization, poverty reduction, and inequality. Results show that the pre-pandemic social protection system would have only buffered about a quarter of income loss, with unemployment insurance more significant for higher-income households, and social safety net transfers crucial for lower-income households, especially those in informal employment. AE successfully supported lower-income households during the pandemic, but its generosity went beyond the stabilization of income, resulting in large fiscal costs.