Aiming at enriching the analysis of the labor market and following international recommendations of the International Labor Organization - ILO, the IBGE is now introducing new indicators in the National Household Sample Survey - Continuous PNAD, which capture information related to the workforce and produce results for Brazil since the beginning of the time series (first quarter of 2012) up to the second quarter of 2016. Starting on November 22, the indicators will be released on a quarterly basis for Brazil, Major Regions and Federation Units, including some disaggregation for a number of socio-demographic characteristics of the population.

Among the new indicators, the highlights are the under-utilization rates of the workforce: the combined underemployment due to insufficient hours of work and unemployment rate deals with persons employed less than 40 work hours per week, but who would like to work for a longer period (underemployment due to insufficient hours of work); the combined unemployment and potential workforce rateencompasses those who would like to work, but did not look for a job or looked for a job but were not available to work (potential workforce); and the composite rate of under-utilization of the workforce, which encompasses the two previous rates, aiming at measuring the under-utilization of the workforce as a whole. Among others, the set of indicators on hours worked, employers and self-employed persons with a CNPJ, number of jobs and employment period are also included.

Released monthly for Brazil and quarterly for the regions, the unemployment rate of the Continuous PNAD remains unchanged. More information on the new unemployment indicators of the Continuous PNAD can be accessed in the Technical Notes 01/2016 and 02/2016. The complete publication of the Continuous PNAD can be accessed here.

Combined underemployment due to insufficient hours of work and unemployment rate is 16.0% in Q2

In the second quarter of 2016, the workforce population (employed + unemployed) added up to 102.4 million persons – 90.8 million employed and 11.6 million unemployed – and the population out of the workforce, 63.9 million persons, adding up to 166.3 million persons at working age (14 years and over).

Among those 90.8 million employed persons, a group of underemployed due to insufficient hours of work – employed persons with less than 40 work hours per week – added up to 4.8 million persons, an estimate above that reported in the previous quarter (4.2 million). 11.6 million unemployed persons plus 4.8 million underemployed persons due to insufficient hours of work reached 16.4 million persons, which represented 9.9% of the total contingent of 166.3 million persons at working age (14 years and over). In the beginning of the survey (2012), the sum of those unemployed with those underemployed due to insufficient hours reached 14.7 million persons.

As a result, the combined underemployment due to insufficient hours and unemployment rate in the first quarter of 2012 (15.3%) tended to drop until the fourth quarter of 2014. This estimate started to rise from the first quarter of 2015 onwards, hitting 14.4% in the third quarter of 2015. It reached 16.0% in the second quarter of 2016.

The combined underemployment due to insufficient hours and unemployment rate is obtained from a division, where the numerator is the sum of the unemployed population with the population of those underemployed due to insufficient hours, and the denominator is the workforce (employed population + unemployed population).

In the beginning of the survey, the underemployment due to insufficient hours of work considered the hours effectively worked, but it changed to the hours usually worked from the fourth quarter of 2015 onwards. According to an ILO resolution, it is up to each country to decide whether effective or usual hours will be used.

Potential workforce rate is 16.4% in Q2 2016

In the second quarter of 2016, the population out of the workforce – those who were neither employed nor looked for a job – added up to 63.9 million persons, being 56.6 million out of the potential workforce and 6.2 million in the potential workforce – persons who either would like to work, but did not look for a job, or who looked for a job, but were not available to work. This accounted for 9.8% of the persons out of the workforce.

The sum of 11.6 million unemployed persons with 6.2 million persons in the potential workforce reached 17.8 million persons in this condition in the second quarter of 2016, which represented 10.7% of the contingent of 166.3 million persons at working age (14 years and over), the highest percentage reported in the time series.

As a result, the combined unemployment and potential workforce rate hit 14.0% in the first quarter of 2012. This combined rate tended to drop until the fourth quarter of 2014, when it started to rise, reaching 16.4% in the second quarter of 2016.

The combined unemployment and potential workforce rate is obtained from a division where the numerator is the sum of the unemployed population with the potential workforce and the denominator is the expanded workforce (employed population + unemployed population + potential workforce).

Workforce under-utilization rate reaches 20.9% in Q2 2016

Together, the contingents of unemployed persons (11.6 million), underemployed persons due to insufficient hours of work (4.8 million) and potential workforce (6.2 million) added up to 22.7 million persons in the second quarter of 2016, which represented 13.6% of the total contingent of 166.3 million persons at working age (14 years and over).

As a result, the composite rate of under-utilization of the workforce – which includes the unemployment rate, the underemployment rate due to insufficient hours and the potential workforce – reached 20.9% in the first quarter of 2012 and tended to drop until the third quarter of 2014. This estimate started to rise from the next quarter, hitting 18.0% in the third quarter of 2015. In the second quarter of 2016, this estimate was of 20.9%.

The workforce under-utilization rate is obtained from a division where the numerator is the sum of the unemployed population with those underemployed due to insufficient hours and the potential workforce and the denominator is the expanded workforce (employed population + unemployed population + potential workforce).

Between 2012 and 2016, average working hours fall from 40.5 to 39.1

The average working hours per week stayed at 39.1 hours in the second quarter of 2016, pointing to a one hour reduction in the average working hours of employed persons when compared with the second quarter of 2012 (40.1 hours). The distribution of the employed population in the groups of hours usually worked in all jobs showed that 52.5% worked between 40 and 44 hours in their jobs in the week of reference. For the hours effectively worked, the percentage of workers in this group of hours was of 49.1%.

Only 19.3% of self-employed workers have CNPJ

As of the fourth quarter of 2015, the Continuous PNAD started to investigate whether the enterprises that self-employed workers and employers worked in the week of reference were registered in the National Directory of Legal Entities - CNPJ of the Federal Revenue of Brazil.

In the second quarter of 2016, 7.5 million workers in Brazil – either self-employed or employers – reported that the enterprises that they worked in the week of reference were registered in the CNPJ. Of the contingent of 22.9 million self-employed workers, about 4.4 million (19.3%) worked in enterprises registered in the CNPJ. This percentage was of 19.1% in the fourth quarter of 2015.

Among the 3.7 million employers in the second quarter of 2016, the survey pointed out that 3.1 million of them worked in the week of reference in enterprises with that register (84.2%). They were 83.0% in the fourth quarter of 2015.

The analysis of the registration of the enterprises by groups of activity showed that the groups of Other services (15.7%), Trade, repair of motor vehicles and motorcycles (15.6%) and Lodging and food (15.0%) recorded the highest percentages of either self-employed workers or employers registered in the CNPJ through the enterprises they were working in the week of reference.

Number of jobs in the week of reference - In the second quarter of 2016, about 2.5 million persons – which corresponded to 2.8% of the employed persons – had two or more jobs in the week of reference. This estimate represented 3.5% of the employed persons four years ago.

Employment period - In the second quarter of 2016, about 70% of the persons were employed for at least two years in the job they had in the week of reference. This percentage significantly increased when compared with the second quarter of 2012.  The upward movement matched with the beginning of the economic crisis Brazil was facing, which led to the conclusion that the increase in the participation of those working for two or more years could be attributed to the non-admission of new workers in the labor market.

Contract type - Along the time series of the survey, about 88.0% of the workers were hired for a indefinite period. This estimate was of 88.4% in the second quarter of 2016, leading to the conclusion that 11.6% of the workers were hired through a temporary contract.

Domestic workers by number of households - In the second quarter of 2016, about 73.2% of the 6.2 million domestic workers were working in only one household in the week of reference.

Administration level of the military and those employed in the public sector - In the second quarter of 2016, about 53.8% of the 11.3 million persons employed either as military or in the public sector in the week of reference were at the municipal level. About 31.4% worked at the state level and 14.8% at the federal level.